Below Are Selected Accounts Taken from the Adjusted Trial Balance

question 1

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Below are selected accounts taken from the adjusted trial balance of Sherri's Designs on December 31, 2015:
Sherri’s Designs has 2,000 shares of common stock outstanding and net income per share for 2015 was $0.63. The income tax rate is 30%.
a.Prepare a single-step income statement.
b.Prepare a multiple-step income statement.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, based on estimated costs and activity levels.

Machine Hours

A measure of production activity or cost allocation based on the number of hours a machine is operated.

Overapplied Overhead

Refers to the situation where the allocated overhead cost is more than the actual overhead incurred by a business.

Predetermined Overhead Rate

An estimated rate used to assign overhead costs to products or services based on a specific activity base.