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

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Definitions:

Veils Are Pierced

A legal metaphor used when courts look beyond the protection usually afforded by the corporate entity structure to hold individuals (e.g., directors, shareholders) personally liable for corporate debts or actions.

Shareholder

An individual or entity that owns one or more shares of stock in a corporation, thus holding a portion of the corporation's ownership and often entitled to a share of the corporation's profits and voting rights.

Domination

The exercise of control or influence over someone or something, or the state of being dominant.

Pseudo-Foreign Corporation

A business entity that operates in a country different from its country of incorporation but is treated as a domestic company for legal or tax purposes.