Welch Corporation Uses a Predetermined Overhead Application Rate of

question 1

Multiple Choice

Welch Corporation uses a predetermined overhead application rate of $.30 per direct labor hour.During the year it incurred $345,000 dollars of actual overhead,but it planned to incur $360,000 of overhead.The company applied $363,000 of overhead during the year.How many direct labor hours did the company plan to incur?

• A)1,150,000
• B)1,190,000
• C)1,200,000
• D)1,210,000

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Definitions:

Public Sector

The part of the economy composed of both public services and public enterprises, managed and financed by the government.

Piece Rates

A pay system where employees are compensated based on the amount of work completed, such as the number of items produced or tasks finished.

Piece Rate Systems

Compensation methods where employees are paid a fixed sum for each unit of production completed.

Base Pay

The initial rate of compensation that an employee receives in exchange for services. It excludes extra lump sum compensation or increases in the rate of pay for overtime or premium pay.