Freeman Company Uses a Predetermined Overhead Rate Based on Direct

question 103

Multiple Choice

Freeman Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.At the beginning of the year,the company estimated manufacturing overhead would be $150,000 and direct labour hours would be 10,000.The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labour hours.The cost records for the year will show which of the following?

• A) Overapplied overhead of $30,000.
• B) Underapplied overhead of $30,000.
• C) Underapplied overhead of $6,000.
• D) Overapplied overhead of $6,000.

---

Definitions:

Hunger

The physical sensation and psychological drive for food intake, resulting from the body's energy needs.

Settling Point

A theory related to body weight regulation, proposing that weight stabilizes around a natural "set point" determined by genetics and environment.

Basal Metabolic Rate

The number of calories required to keep your body functioning at rest, also known as metabolism's baseline rate.

Serotonin

A neurotransmitter associated with mood regulation, happiness, and anxiety control.