Find the Annual Recovery for Year 1

question 2

Short Answer

Find the Annual Recovery for Year 1.
$$\begin{array} { | c | c | c | c | c | } \hline \text { Method } & \text { Purchased } & \text { Cost } & \text { Recovery Class } & \begin{array} { c } \text { Annual Recovery for } \\\text { Year 1 }\end{array} \\\hline \text { MACRS } & \text { Nov } 5 & \$ 12,000 & 3 & \text { A } \\\hline\end{array}$$

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Definitions:

Predetermined Overhead Rate

A predetermined rate for assigning manufacturing overhead to products, calculated at the start of the period using estimated expenses and levels of activity.

Direct Labor-Hours

Total working hours of employees directly taking part in the production operation or service provision.

Manufacturing Overhead

Refers to all the indirect costs associated with manufacturing, beyond direct labor and materials, such as utilities and rent for the manufacturing space.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, calculated based on estimated overhead costs and an allocation base such as direct labor hours.