The Following Budget Data Are Available for Howers Company If Overhead Is to Be Applied Based on Direct Labor

question 174

Multiple Choice

The following budget data are available for Howers Company: $$\begin{array} { |l r |} \hline \text { Estimated direct labor hours } & 16,000 \\\text { Estimated direct labor dollars } & \$ 170,000 \\\text { Estimated coerhead costs } & \$ 207,200\\\hline\end{array}$$
If overhead is to be applied based on direct labor hours,the predetermined overhead rate per hour (rounded) is

• A) $13.45.
• B) $12.95.
• C) $12.05.
• D) $11.45.

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Definitions:

Liabilities

Financial obligations a company owes to outside parties, such as loans, accounts payable, and mortgages.

Assets

Company-owned valuables that offer economic benefits and are expected to provide future profit.

Revenue

The total amount of money received by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.

Accounting Equation

The fundamental equation of double-entry bookkeeping: Assets = Liabilities + Equity.