If Overhead Is Applied on the Basis of Direct Labor

question 6

Multiple Choice

If overhead is applied on the basis of direct labor hours, and actual hours worked are less than budgeted, which of the following is true, assuming estimated overhead is correct?

• A) Overhead is probably overapplied.
• B) Overhead is probably underapplied.
• C) Applied overhead and actual overhead are equal.
• D) None of these is true.

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Definitions:

Liters

A metric unit of volume equal to one cubic decimeter.

Linear Equations

Equations that depict lines in a coordinate system and can be written in the form \(y = mx + b\), where \(m\) is the slope and \(b\) is the y-intercept.

System

A set of principles or procedures according to which something is done; in mathematics, often refers to a set of equations or inequalities.

Elimination

A method used in algebra to solve systems of equations by removing variables to find their values.