Freeman Corporation Estimates Uncollectible Accounts Using a Percentage of Outstanding

question 45

Multiple Choice

Freeman Corporation estimates uncollectible accounts using a percentage of outstanding accounts receivable. After the year-end adjustment for bad debt expense was made, the company's records reflected the following information (in 000's) :

The bad debt expense for the year was

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Definitions:

Standard Machine-Hours

A measure of manufacturing time that is expected to be used, based on a standard rate of output per machine.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct labor and direct materials. This includes expenses such as utilities and rent for the manufacturing facilities.

Direct Labor Costs

Expenses associated with employees who are directly involved in the production of goods or services.

Actual Hours

Refers to the real amount of time spent on a task or activity, as recorded or reported.