Walsam Tools Applies Manufacturing Overhead Based on Direct Labor Hours

question 37

Multiple Choice

Walsam Tools applies manufacturing overhead based on direct labor hours.Information concerning manufacturing overhead and labor for August follows: $$\begin{array} { l r r } & \text { Estim ated } & \text { Actual } \\\text { Overhead cost } & \$ 160,000 & \$ 161,000 \\\text { Direct labor hours } & 8,000 & 8,200 \\\text { Direct labor cost } & \$ 120,000 & \$ 115,800\end{array}$$ How much is the predetermined overhead rate?

• A)$1.33
• B)$20.00
• C)$1.03
• D)$19.63

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Definitions:

Borrowers

Individuals or entities that take funds from a lender under the agreement to return the funds, typically with interest, over a set period.

Lender

An individual, a financial institution, or another entity that lends money to another party with the expectation that the money will be paid back with interest.

Floor Price

The minimum price level set for a financial security, commodity, or good, below which it cannot be sold in the market.

Convertible Bonds

Convertible bonds are securities that can be turned into a specified amount of equity in the company that issued them, typically at the choice of the person holding the bond, during specific periods of their duration.