More Manufacturing Company Uses a Predetermined Overhead Rate Based on Direct

question 33

Multiple Choice

More Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, More worked 87,000 actual direct labour hours and incurred $300,000 of actual manufacturing overhead cost. More had initially estimated that it would work 85,000 direct labour hours during the year and incur $340,000 of manufacturing overhead cost. Based on the information provided, More's manufacturing overhead cost for the year was:

• A)$8,000 overapplied.
• B)$40,000 underapplied.
• C)$40,000 overapplied.
• D)$48,000 overapplied.
• E)$48,000 underapplied.

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Definitions:

Barriers To Entry

Barriers to entry are obstacles that make it difficult for new competitors to enter a market, which can include high startup costs, strict regulations, or strong brand loyalty among consumers.

Single-price Monopolist

Describes a monopoly that sells its product or service at a single price to all customers, without price discrimination.

Individual Willingness

Refers to the level of price or effort a person is ready to offer to acquire a specific good or service.

Price Discrimination

A pricing strategy where a company sells the same product to different customers at different prices based on market factors, demand elasticity, or customer characteristics.