An Organization's Accountant Is Estimating Next Period's Total Overhead Costs

question 42

Multiple Choice

An organization's accountant is estimating next period's total overhead costs. She performed two regression analyses, one based on direct labor hours and the other based upon machine hours. The results were: Total overhead = $150,000 + $4 x direct labor hours
Adjusted R-square = 0.65
Total overhead = $130,000 + $5 x machine hours
Adjusted R-square = 0.77
For the next period the accountant anticipates using 28,000 direct labor hours and 26,000 machine hours. Based upon this information, what is the best estimate for overhead for the next period?

• A) $262,000
• B) $260,000
• C) $254,000
• D) $270,000

---

Definitions:

Maintained Social Capital

The preservation and nurturing of valuable social networks and relationships over time to benefit from mutual support and resources.

Latent Ties

Latent ties refer to potential social connections that are not currently active but can be activated when necessary, representing untapped social resources.

Reputational Capital

The value derived from the positive perception of a business or brand by its customers, stakeholders, and the broader public.