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.

---

Definitions:

Retainer Fee

An upfront cost paid by a client to secure the services of a consultant, lawyer, or other professional for a specified period, ensuring availability and commitment.

Recorded

The process of documenting financial transactions in the accounting records of an organization.

Adjustment

An accounting action taken to alter financial statements' figures, ensuring they accurately reflect a business's financial status.

Note Receivable

A written promise for amounts to be received by a debtor, typically including interest amounts.