A Company Allocates Overhead to Production on the Basis of Direct

question 97

Multiple Choice

A company allocates overhead to production on the basis of direct labor cost.If the company's total estimated overhead is $870,000 and estimated direct labor cost is $1,160,000,determine the amount of overhead to be allocated to finished goods inventory.There is $791,000 of total direct labor cost in the jobs in the finished goods inventory.

• A) $1,054,667
• B) $593,250
• C) $1,275,853
• D) $1,079,482
• E) $79,000

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Definitions:

Demand Schedule

A table that lists the quantity of a good that consumers are willing and able to purchase at various prices over a specific period.

Cost Schedules

A representation or table that outlines the costs associated with production at different levels of output.

Economic Profits

Economic profits are the financial gains made by a firm or individual after accounting for both explicit and implicit costs, distinguishing from accounting profits by considering opportunity costs.

Monopolistically Competitive

A commercial framework where numerous companies offer similar, yet not exactly identical, products, granting them some level of market influence and the ability to distinguish their offerings.