Bernson Corporation Is Using a Predetermined Overhead Rate That Was

question 32

Multiple Choice

Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period.The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period.The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:

• A) $464,120
• B) $492,000
• C) $487,703
• D) $25,000

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Definitions:

Compound Rate

The rate of interest used in calculating compound interest, typically applied over multiple compounding periods.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.

Compounded Semiannually

Interest that is computed and appended to the original amount semi-annually.

Effective Rate

The actual interest rate that an individual earns or pays on an investment, loan, or other financial product, after compounding and other factors are taken into account.