Dowan Company Uses a Predetermined Overhead Rate Based on Direct

question 12

Multiple Choice

Dowan Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.During the year,Dowan Company incurred $156,600 in actual manufacturing overhead cost.The Manufacturing Overhead account showed that overhead was underapplied by $12,600 for the year.If the predetermined overhead rate is $6.00 per direct labour-hour,how many hours did the company work during the year?

• A) 24,000 hours.
• B) 25,000 hours.
• C) 26,000 hours.
• D) 28,200 hours.

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Definitions:

Compound Annual Rate

The rate of return that would be required for an investment to grow from its beginning balance to its ending one, compounding over a period of a year.

Compounded Annually

Describes the calculation of interest on an investment whereby the interest earned each year is added to the principal sum, leading to interest being earned on interest from the subsequent year onwards.

Monthly Compounded

Calculation of interest on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan, compounded every month.

RRSP

Registered Retirement Savings Plan, a Canadian account for holding savings and investment assets, with tax benefits.