Hudson,Inc

question 19

Multiple Choice

Hudson,Inc.has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year.If direct labor hours for the year total 18,000 and actual factory overhead totals $350,000,what is the amount of overapplied or underapplied overhead for the year?

• A)$10,000 overapplied
• B)$10,000 underapplied
• C)$50,000 underapplied
• D)$50,000 overapplied

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Definitions:

Fixed Charge Coverage

A financial metric evaluating how well a company can pay off its fixed expenses, like interest and leases, using its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Times Interest Earned Ratio

A measure of a company's ability to meet its interest obligations, calculated as earnings before interest and taxes divided by interest expense.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, including issuing or repurchasing equity and debt.

Financial Assets

Assets that derive value because of a contractual right or ownership claim, including stocks, bonds, and bank deposits.