Peterson Company Has Applied Overhead of $75,000 and Actual Overhead

question 162

Multiple Choice

Peterson Company has applied overhead of $75,000 and actual overhead of $87,600 for the month of October. It applies overhead on the basis of direct labour hours, which equalled 15,000 in October. Overhead for the year was estimated to be $925,000. What are the direct labour hours estimated for the year?

• A) 150,000
• B) 170,000
• C) 175,200
• D) 185,000

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Definitions:

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible, typically characterized by the absence of involuntary unemployment.

Full Production

A state of economic production in which all available resources (labor, capital, etc.) are being used efficiently, leading to the maximum possible output.

Capacity Utilization

The percentage of a country's production capacity that is actually being used over a certain period of time, indicating the overall economic activity and efficiency.

Labor Unemployment

A situation where individuals who are willing and able to work are unable to find employment, often measured by the unemployment rate.