Asadi Company Uses a Job Costing System and Allocates Overhead

question 157

Multiple Choice

Asadi Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 20x5 is as follows: Estimated Actual
Manufacturing overhead $166,500 $165,000
Direct labour hours 50,000 60,000
The amount of over- or underapplied overhead for 20x5 was:

• A)$1,500 underapplied
• B)$3,000 underapplied
• C)$1,500 overapplied
• D)$34,800 overapplied

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Definitions:

Reliable Detection

The ability to consistently and accurately identify or recognize the presence of a specific stimulus or condition.

Sense Organs

Specialized structures in the body that respond to external stimuli and send signals to the brain, enabling perception.

External Environment

All of the external factors, forces, situations, and events outside the organization that affect its performance and strategies.

ESP

Extrasensory perception, a claimed ability to gain information through means other than the known human senses.