At the Beginning of the Current Year CR Company Estimated

question 26

Multiple Choice

At the beginning of the current year CR Company estimated the following costs:
$\begin{array}{|l|r|}\hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$
CR Company estimated 20,000 labour hours to be worked during the year.Actual labour hours worked were 22,000 hours.If overhead is applied on the basis of direct labour hours,what will be the overhead applied for the year?

• A) $55,000.
• B) $49,500.
• C) $103,400.
• D) $75,900.

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Definitions:

Standardize

The process of adjusting values measured on different scales to a notionally common scale, often used in statistical analysis to compare data points.

Normal Curve

A symmetrical, bell-shaped curve that represents the distribution of many types of data; most scores are near the mean, with fewer scores at the extremes.

Z Distribution

The Z distribution is a normal distribution that has been standardized so that it has a mean of 0 and a standard deviation of 1; it's also known as the standard normal distribution.

Probability

A quantification of the chance of an event taking place, assigned a value between 0, which denotes that the event is impossible, and 1, which denotes absolute certainty of the event happening.