Hancock Manufacturing Allocates Overhead to Production on the Basis of Direct

question 100

Multiple Choice

Hancock Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Hancock estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Hancock incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs. Compute the overhead application rate.

• A) 180%.
• B) 55.6%.
• C) 186%.
• D) 184%.
• E) 96.6%.

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Definitions:

Equity

The principle of fairness or justice in the distribution of resources, rewards, and treatment among individuals or groups.

Cognitive Dissonance

A psychological state where an individual experiences discomfort due to holding conflicting beliefs, attitudes, or behaviors, prompting a change to reduce the dissonance.

Job Descriptive Index

A psychometrically validated survey instrument that measures job satisfaction in five facets: pay, promotion, coworkers, supervision, and the work itself.

Job Satisfaction

The level of contentment employees feel about their jobs, including aspects like work environment, pay, and job duties.