Aronson & Associates LLP
Aronson & Associates LLP, an Accounting

question 60

Multiple Choice

Aronson & Associates LLP
Aronson & Associates LLP, an accounting firm, assigns overhead to clients based on direct labour hours. The following information is available for the month of March:
$\begin{array}{ll}\text { Estimated direct labour hours } & 4000 \text { hours } \\\text { Estimated overhead costs } & \$ 8000 \\\text { Actual direct labour hours } & 4200 \text { hours } \\\text { Actual overhead costs } & \$ 8190\end{array}$

-The amount of applied overhead for March will be:

• A) $7800
• B) $8400
• C) $8610
• D) $8000

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Definitions:

Quality of Earnings

An assessment of the degree to which a company's earnings are derived from sustainable, core business activities.

Productive Assets

Assets that are utilized in the production process to generate revenue, including machinery, buildings, and equipment.

Investing Activities

Financial transactions related to the acquisition or sale of long-term assets and other investments not considered cash equivalents.

Direct Method

An accounting practice for presenting cash flows from operating activities by listing major classes of gross cash receipts and payments.