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

question 45

Multiple Choice

Bradbeer Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,500 hours. At the end of the year, actual direct labor-hours for the year were 16,000 hours, the actual manufacturing overhead for the year was $233,000, and manufacturing overhead for the year was underapplied by $15,400. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:

• A)$249,375
• B)$217,600
• C)$228,000
• D)$238,000

---

Definitions:

Larger Sample Sizes

Refers to increasing the number of observations in a study to improve the reliability and validity of statistical inferences.

Unbiased Estimators

Statistical estimators that, on average, hit the true parameter value of a population, not systematically overestimating or underestimating it.

Variance

A statistical measure of the distribution's spread, variance quantifies how much the numbers in a data set differ from the mean (or average) of that set.

Relatively More

A comparative term indicating a greater amount, number, or degree in comparison to another or others.