Beta Company Uses a Predetermined Overhead Rate Based on Direct

question 145

Multiple Choice

Beta Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs.The company estimated that it would incur $600,000 of manufacturing overhead during the year and that 150,000 direct labor hours would be worked.During the year,the company actually incurred manufacturing overhead costs of $582,000 and 135,000 direct labor hours were worked.
By how much was manufacturing overhead overallocated or underallocated for the year?

• A)$18,000 underallocated
• B)$42,000 overallocated
• C)$42,000 underallocated
• D)$18,000 overallocated

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Definitions:

Family and Medical Leave Act

A U.S. labor law that provides employees with unpaid, job-protected leave for family and health-related reasons.

Employers

Entities or individuals who hire and pay people to work for them, often within an organizational structure that includes responsibilities such as providing salaries and ensuring workplace safety.

Generosity of Benefits

Refers to the extent to which an employer offers comprehensive and advantageous benefits to its employees, including health insurance, retirement plans, and paid time off.

Textile Manufacturing

The process of converting raw fibers into finished fabrics or products through various methods of production.