Millenium Manufacturing Is Considering Two Methods for Applying Overhead

question 76

Short Answer

Millenium Manufacturing is considering two methods for applying overhead. Estimated data for t next year, 2019, follows.

1. What is the overhead application rate based on direct labor costs?
2. What would be the overhead application rate based on direct labor hours?
3. If a job requires 720 hours of direct labor, what is the amount of overhead applied to the job usin the rate based on direct labor hours?

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Definitions:

Fiduciary Duty

A legal obligation of one party to act solely in the best interest of another party, such as a trustee to the beneficiary, corporate board members to the shareholders, or agents to their principals.

Obligations

Duties or responsibilities that are legally or morally bound to an individual or entity.

Agent

An individual or entity authorized to act on behalf of another, usually in business transactions or legal matters.

Principal

The amount of money borrowed or invested, separate from interest or profit generated from it.