Kris Company Calculates Its Predetermined Rates Using Practical Volume, Which

question 88

Multiple Choice

Kris Company calculates its predetermined rates using practical volume, which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000, of which $994,000 is fixed overhead.The actual results for the year are as follows:

- The predetermined variable overhead rate is

• A) $3.00 per direct labor hour.
• B) $2.50 per direct labor hour.
• C) $5.50 per direct labor hour.
• D) $3.35 per direct labor hour.
• E) None of these are correct.

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Definitions:

Yen Appreciates

An increase in the value of the Japanese yen in comparison to another currency in the foreign exchange markets.

Net Exports

The value of a country's total exports minus its total imports, representing the external demand for a nation’s goods and services.

Positive Entry

The introduction of new firms into a market in response to observed profits, leading to increased competition.

Goods Imports

The action or process of bringing goods and services from foreign countries into a domestic market for consumption or use.