Kaplan Inc

question 27

Multiple Choice

Kaplan Inc.applies overhead on the basis of direct labor hours.During 2016,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2016,which of the following would not be a reason for the underapplied overhead?

• A)Estimated direct labor hours differed from actual direct labor hours.
• B)Applied overhead was lower than actual overhead.
• C)Estimated overhead costs differed from actual overhead costs.
• D)Applied overhead was higher than actual overhead.
• E)None of the answer choices is correct.

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Definitions:

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and a potential say in company decisions.

Cash

Liquid currency or assets that can be immediately used to make transactions or settle debts.

Day-to-day Expenses

Regular and routine expenses that are necessary for the daily operations of an individual or organization, such as groceries or office supplies.