Whitney Company Uses a Predetermined Rate to Apply Overhead

question 43

Multiple Choice

Whitney Company uses a predetermined rate to apply overhead.At the beginning of the year,Whitney estimated its overhead costs at $280,000,direct labour hours at 40,000,and machine hours at 10,000.Actual overhead costs incurred were $289,000,actual direct labour hours were 41,000,and actual machine hours were 11,000. Suppose the predetermined overhead rate is based on machine hours.What would be the total amount credited to the factory overhead account for the year for Whitney?

• A)$240,000
• B)$246,000
• C)$249,280
• D)$308,000

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Definitions:

Marginal Costs

The surcharge associated with the fabrication of an additional unit of a good or service.

Short-Run Supply Schedule

The Short-Run Supply Schedule illustrates how much of a good or service producers are willing to supply at different price levels within a short time frame.

Cost Data

Information related to the expenses involved in producing a good or service, including materials, labor, and overhead costs.

Shutdown Point

The level of production and price at which a firm's total revenue is equal to its total variable costs, below which the firm would cease production temporarily.