During the Year,Paul Company Used a Predetermined Overhead Rate of $3.50

question 8

Multiple Choice

During the year,Paul Company used a predetermined overhead rate of $3.50 per direct labour hour,based on an estimate of 22,000 direct labour hours to be worked during the year.Actual overhead cost and activity during the year were:
What was the under- or overapplied overhead for the year?

• A) $2,500 overapplied.
• B) $2,500 underapplied.
• C) $10,500 overapplied.
• D) $13,000 underapplieD. $90,000 - (25,000 @ $3.50)= $2,500 underapplieD.

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Definitions:

Two-tail Test

A statistical test where the critical area of a distribution is two-sided and tests whether a sample is greater than or less than a certain range of values.

Sample Variances

A measure of the dispersion or variability within a sample data set, calculated as the sum of squared deviations from the mean, divided by the number of observations minus one.

Sample Sizes

The number of observations or datapoints collected in a sample, which can affect the accuracy and reliability of statistical analyses.

Rejection Region

The range of values for which the null hypothesis is not considered probable and therefore rejected in hypothesis testing.