Johansen Corporation Uses a Predetermined Overhead Rate Based on Direct

question 177

Multiple Choice

Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.The Corporation has provided the following estimated costs for the next year:
Jameson estimates that 20,000 direct labor-hours will be worked during the year.The predetermined overhead rate per hour will be:

• A) $2.00 per direct labor-hour
• B) $2.79 per direct labor-hour
• C) $3.00 per direct labor-hour
• D) $4.00 per direct labor-hour

---

Definitions:

Paid-In Capital

The amount of money a company has received from shareholders in exchange for shares of stock.

Capital Surplus

Capital surplus refers to the amount that a company raises from the sale of its shares above their par value, often reflecting additional investment or gains retained in the business.

Legal Capital

The portion of a company's equity that cannot be distributed to shareholders and must be maintained as a financial protection for creditors.

Market Value

The current price at which an asset or service can be bought or sold in an open market.