The Predetermined Manufacturing Overhead Rate for 2012 Was $4

question 15

Multiple Choice

The predetermined manufacturing overhead rate for 2012 was $4.00 per direct labor hour;employees were paid $5.00 per hour.If the estimated direct labor cost was $75,000,what was the estimated manufacturing overhead?

• A)$15,000.
• B)$60,000.
• C)$75,000.
• D)$93,750.

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Definitions:

Least-squares Regression

Least squares regression is a statistical technique that identifies the optimal fit line by minimizing the sum of the squared differences between the actual and forecasted values.

Variable Component

The portion of costs or expenses that varies directly with changes in business activity level.

Inspection Cost

Expenses associated with the activities undertaken to ensure that products or services meet the required standards and specifications.

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in response to changes in production or sales volumes.