(Appendix 2B) the Management of Plitt Corporation Would Like to Investigate

question 18

Multiple Choice

(Appendix 2B) The management of Plitt Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 69,000 machine-hours. Capacity is 82,000 machine-hours and the actual level of activity for the year is assumed to be 72,400 machine-hours. All of the manufacturing overhead is fixed and both the estimated amount at the beginning of the year and the actual amount at the end of the year are assumed to be $4,130,340 per year. It is assumed that a number of jobs were worked on during the year, one of which was Job Q20L which required 470 machine-hours.
-If the company bases its predetermined overhead rate on capacity,then the amount of manufacturing overhead charged to Job Q20L is closest to:

• A) $28,589.98
• B) $26,592.60
• C) $26,812.98
• D) $23,673.90

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Definitions:

Recruiting

The process of identifying, attracting, and selecting suitable candidates for a job within an organization.

Moderating

The act of making something less extreme or severe, or the process of lessening the impact or intensity of something.

Brainstorming

A creative problem-solving technique where participants openly share and generate a multitude of ideas without immediate judgment or criticism.

Cohesive

The quality of forming a united whole, indicating how well elements stick together and are mutually supportive within a group or system.