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

question 52

Multiple Choice

Cribb Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,900 hours and the total estimated manufacturing overhead was $341,890. At the end of the year, actual direct labor-hours for the year were 16,700 hours and the actual manufacturing overhead for the year was $336,890. Overhead at the end of the year was:

• A)$22,920 underapplied
• B)$17,920 overapplied
• C)$17,920 underapplied
• D)$22,920 overapplied

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Definitions:

Scientific Management

A management theory that emphasizes the use of scientific methods to optimize labor productivity and economic efficiency, originally developed by Frederick W. Taylor.

Vested Interests

Stakeholders or individuals who have a personal stake or benefit in a particular outcome or decision.

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Democratic Government

refers to a system of governance where power is vested in the hands of the people, who exercise power directly or through elected representatives, based on principles of freedom, equality, and justice.