Golden Corporation Uses Direct Labor-Hours in Its Predetermined Overhead Rate

question 116

Multiple Choice

Golden Corporation uses direct labor-hours in its predetermined overhead rate.At the beginning of the year,the estimated direct labor-hours were 21,600 hours.At the end of the year,actual direct labor-hours for the year were 20,400 hours,the actual manufacturing overhead for the year was $506,920,and manufacturing overhead for the year was underapplied by $23,440.The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:

• A) $501,920.
• B) $531,445.
• C) $483,480.
• D) $511,920.

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Definitions:

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collectible, serving as a contra-asset on the balance sheet.

Bad Debt Expense

An expense reported by businesses to cover accounts receivable that are unlikely to be collected.

Adjusting Entry

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Written Instrument

A legal document delineating rights, duties, or liabilities, often used in financial and property transactions.