Capalbo Corporation Bases Its Predetermined Overhead Rate on the Estimated

question 98

Multiple Choice

Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year.At the beginning of the most recently completed year,the company estimated the labor-hours for the upcoming year at 52,000 labor-hours.The estimated variable manufacturing overhead was $2.78 per labor-hour and the estimated total fixed manufacturing overhead was $1,192,360.The actual labor-hours for the year turned out to be 52,600 labor-hours.The predetermined overhead rate for the recently completed year was closest to:

• A)$2.78
• B)$25.45
• C)$25.71
• D)$22.93

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Definitions:

Express Contract

An agreement with clear, explicit terms that are communicated verbally or in writing between parties.

Implied Contract

A contract that arises not from words of agreement but from the conduct of the parties.

Executory Contract

An executory contract is a contract that has not yet been fully performed or completed by one or more parties.

Agreed Upon

A condition or decision reached by two or more parties after a negotiation or discussion.