Carlson Company Uses a Predetermined Rate to Apply Overhead

question 139

Multiple Choice

Carlson Company uses a predetermined rate to apply overhead.At the beginning of the year,Carlson estimated its overhead costs at $240,000,direct labour hours at 40,000,and machine hours at 10,000.Actual overhead costs incurred were $249,280,actual direct labour hours were 41,000,and actual machine hours were 11,000. What is the predetermined overhead rate per machine hour for Carlson?

• A)$5.85
• B)$6.08
• C)$22.66
• D)$24.00

---

Definitions:

Pledging Accounts Receivable

The practice of using accounts receivable as collateral for a loan.

Internal Control

Systems and processes put in place by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Adequate Records

Maintaining sufficient and detailed financial documents to accurately capture a company's transactions, facilitating scrutiny, and ensuring compliance with laws and regulations.

Internal Control

A system of policies and procedures designed by management to safeguard company assets, ensure financial report accuracy, and comply with laws and regulations.