The Following Information Has Been Gathered for the Harrell Manufacturing

question 120

Multiple Choice

The following information has been gathered for the Harrell Manufacturing Company for its fiscal year ending December 31: What is the predetermined manufacturing overhead rate,assuming direct labor cost is used as the activity base?
$$\begin{array} { | l | r | } \hline \text { Actual manufacturing overhead costs } & \$ 212,500 \\\hline \text { Actual direct labor hours } & 54,900 \\\hline \text { Actual direct labor costs } & \$ 445,000 \\\hline \text { Estimated manufacturing overhead costs } & \$ 210,000 \\\hline \text { Estimated direct labor } & \$ 434,000 \\\hline \text { Estimated direct labor hours } & 56,000 \\\hline\end{array}$$

• A) 48.4%.
• B) 47.2%.
• C) 49.0%.
• D) 47.8%.

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Definitions:

Market Demand

The overall amount of a product or service that every consumer in a market is ready and capable of buying at different price levels.

Negative Externalities

Unintended and uncompensated costs imposed by one party's actions on others not involved in the transaction.

Efficiency Loss

The loss of economic efficiency that can occur when the balance between supply and demand is not achieved, leading to potential welfare loss.

Deadweight Loss

See efficiency loss.