Dowan Company Uses a Predetermined Overhead Rate Based on Direct

question 107

Multiple Choice

Dowan Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.Last year,Dowan Company incurred $156,600 in actual manufacturing overhead cost.The Manufacturing Overhead account showed that overhead was underapplied by $12,600 for the year.If the predetermined overhead rate is $6.00 per direct labour-hour,how many hours did the company work during the year?

• A) 24,000 hours.
• B) 25,000 hours.
• C) 26,000 hours.
• D) 28,200 hours.

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Definitions:

Physical Controls

Security measures that are implemented to protect assets, including locks, surveillance cameras, and restricted access areas.

Segregation Of Duties

A risk management concept that divides tasks among different people to prevent fraud and errors in an organization.

Warehouse Custodian

An entity responsible for the storage and security of physical goods in a warehouse.

Accounting Records

Documentation and books used in the preparation of financial statements, including ledgers, journals, and all relevant supporting documents.