Bean Company Uses a Job Order Cost System and Last

question 93

Essay

Bean Company uses a job order cost system and last period incurred $70,000 of overhead and $100,000 of direct labor. Bean estimates that its overhead next period will be $65,000. The company also expects to incur $100,000 of direct labor. If Bean bases its overhead applied on direct labor cost, what should be the overhead allocation rate for the next period?

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Definitions:

Independent Variables

In experimental research, variables that are manipulated or controlled by the researcher to study their effect on dependent variables.

Dependent Variable

The variable in experimental research that is expected to change as a result of manipulations to the independent variable.

Control Variable

A factor that is kept constant to accurately test the impact of an independent variable on a dependent variable in an experiment.

Placebo

A harmless substance with no therapeutic effect, used in controlled experiments to test the efficacy of treatments.