The Following Data Are for Parker Corporation for 20X4

question 95

Multiple Choice

The following data are for Parker Corporation for 20X4.

-The total of the master-budget variances is

• A) $8,000 favourable.
• B) $8,000 unfavourable.
• C) $1,000 unfavourable.
• D) $1,000 favourable.

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Definitions:

Predetermined Overhead Rate

The rate calculated before the period begins, used to allocate manufacturing overhead costs to individual units of production based on a consistent measure, such as direct labor hours.

Manufacturing Overhead

Indirect factory-related costs that are not directly tied to a specific product, such as maintenance and factory utilities.

Overapplied

In cost accounting, refers to a situation where the allocated amount of an indirect cost exceeds the actual incurred cost.

Underapplied

A situation where the allocated costs are less than the actual costs incurred, often in the context of manufacturing overhead.