PaperPro Produces Two Models of Staplers-Executive and Basic Which of the Following Is Closest to the Overhead Rate

question 34

Multiple Choice

PaperPro produces two models of staplers-Executive and Basic.The annual production and sales of Executive and Basic are 800 and 500 units, respectively.The company has traditionally used direct labor hours to apply manufacturing overhead.Executive requires 0.3 labor hours per unit and Basic requires 0.2 labor hours per unit.The company has decided to utilize activity-based costing with three cost pools.Estimated costs for each pool are as follows: $\begin{array}{lrrrr}&\text { Estimated }\\\text { Activity } & \text { Overhead } & \text { Expected }&\text { Activity } \\\text { Cost Pool } & \text { Costs } & \text { Executive }&\text { Basic }&\text { Total }\\\hline\text { Assembly } & \$ 24,025 & 450 & 420 & 870 \\\text { Packaging } & 16,880 & 2,000 & 750 & 2,750 \\\text { General Factory } & 32,014 & 120 & 150 & 270 \\\quad \text { Total } & \$ 72,919 & & &\end{array}$ Which of the following is closest to the overhead rate for assembly using activity-based costing?

• A)$81.81
• B)$53.39
• C)$57.20
• D)$27.61

Understand and apply the concept of predetermined overhead rates in the calculation of applied manufacturing overhead.

Identify and calculate underapplied or overapplied manufacturing overhead and its implications.

Understand the distinction between job-order costing and process costing systems.

Analyze T-account transactions to determine ending balances in various accounts such as Work in Process, Finished Goods, and Manufacturing Overhead.

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A jumble of words that is meaningless or hard to understand, often used to describe disorganized speech seen in severe mental illnesses.

Neologism

A newly coined word or expression, often used in the context of linguistic creativity or as a symptom of certain mental health conditions.

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A condition characterized by a significant reduction in the amount of speech, often seen in schizophrenia.

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The patterning of speech characterized by rhyming or alliteration, often seen in conditions like bipolar disorder or schizophrenia during manic or psychotic episodes.