Biltz Company Uses a Predetermined Overhead Rate Based on Direct

question 314

Multiple Choice

Biltz Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs.During the year,the company actually incurred manufacturing overhead costs of $582,000 and 135,000 direct labor hours were worked.The company estimated that it would incur $525,000 of manufacturing overhead during the year and that 150,000 direct labor hours would be worked.
By how much was manufacturing overhead overallocated or underallocated for the year?

• A)$57,000 overallocated
• B)$57,000 undererallocated
• C)$109,500 underallocated
• D)$109,500 overallocated

---

Definitions:

Private Sector

The sector of the economy operated by private individuals and businesses aiming for profit, without government oversight.

Keynesian Economists

Keynesian economists follow the principles of John Maynard Keynes, advocating for government intervention to moderate economic cycles and promote demand-driven growth.

Economic Instability

A condition characterized by significant fluctuations in economic performance, manifesting in variables such as prices, demand, employment, and GDP.

Money Supply Growth

An increase in the total amount of money in circulation or in the economy within a specific period.