The Holland Company Uses a Predetermined Overhead Rate of $12

question 38

Multiple Choice

The Holland Company uses a predetermined overhead rate of $12 per direct labor hour to apply overhead.During the year, 30,000 direct labor hours were worked.Actual overhead costs for the year were $320,000.The overhead variance is

• A) $36,000 overapplied.
• B) $35,560 underapplied.
• C) $40,000 underapplied.
• D) none of the above.

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Definitions:

Perfectly Inelastic

A situation in which the quantity demanded or supplied does not change regardless of any change in price.

Fixed Number

A specific, unchanging quantity that does not vary under different conditions or over time.

Supply Curve

A graph showing the relationship between the price of a good and the amount of it that producers are willing to supply at those prices.

Short-Run Elasticity

Refers to the responsiveness of the quantity demanded or supplied of a good or service to a price change over a short period.