Beta Company Uses a Predetermined Overhead Rate Based on Direct

question 275

Multiple Choice

Beta Company uses a predetermined overhead rate based on direct labour hours to allocate manufacturing overhead to jobs. The company estimated that it would incur $600,000 of manufacturing overhead during the year and that 150,000 direct labour hours would be worked. During the year, the company actually incurred manufacturing overhead costs of $582,000 and 135,000 direct labour hours were worked. By how much was manufacturing overhead overallocated or underallocated for the year?

• A) $18,000 underallocated
• B) $42,000 overallocated
• C) $42,000 underallocated
• D) $18,000 overallocated

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Definitions:

Stratification

The structuring of inequalities within a society, often based on class, race, gender, or other socio-economic indicators, that places individuals and groups into different tiers of advantage or disadvantage.

Social Mobility

The ability for individuals or groups to move within a social hierarchy, which can be upward or downward, and is influenced by factors like education, income, and social connections.

2008 Recession

A severe global economic downturn that began in 2008, triggered by the collapse of the U.S. housing market and resulting in significant financial crisis, unemployment, and loss of wealth worldwide.

Upward Mobility

The ability for an individual or group to improve their social status, often measured by changes in income, occupation, or education.