Gerstein Corporation Uses a Job-Order Costing System with a Single

question 100

Multiple Choice

Gerstein Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.70 per direct labor-hour, and 50,000 direct labor-hours. The company recently completed Job M800 which required 150 direct labor-hours.
-The predetermined overhead rate is closest to:

• A) $26.40
• B) $25.14
• C) $23.43
• D) $24.60

---

Definitions:

Antitrust Amendments

Modifications made to laws that regulate competition among businesses, intended to prevent monopolies and promote fair competition.

Retailer

A business or person that sells goods directly to consumers, acting as the final link in the distribution chain from manufacturers to end users.

Robinson-Patman Act

A federal law in the United States that bans practices by producers that hinder competition, particularly discriminating in pricing.

Functional Discount

A price reduction offered to channel members who perform certain functions such as selling, storing, and record-keeping.