The Following Data Are Available for Starbrite Corporation If Overhead Is Applied Based on Direct Labor Hours,the Predetermined

question 110

Multiple Choice

The following data are available for Starbrite Corporation: $$\begin{array} { | l | l | } \hline \text { Estimated direct labor hours } & 800 \\\hline \text { Estimated overhead } & \$ 36,000 \\\hline\end{array}$$ If overhead is applied based on direct labor hours,the predetermined overhead rate is:

• A)$45.
• B)$450.
• C)$222.
• D)$2,220.

---

Definitions:

Sales Refund Payable

A liability account that holds funds reserved for future refunds to customers for returned goods.

Sales Returns

Goods returned by customers to the seller after the sale, which result in a reduction of revenue previously recognized.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the correct periods.

Periodic Inventory System

An inventory accounting system where the inventory count is physically conducted at specific intervals, typically at the end of an accounting period.