Malcolm Company Uses a Predetermined Overhead Rate Based on Direct $\begin{array}{lrr} \text { Manufacturing overhead. } &£ 17,000\\ \text {Direct Labour hours. } &13,600\\\end{array}$

question 7

Multiple Choice

Malcolm Company uses a predetermined overhead rate based on direct Labour hours to apply manufacturing overhead to jobs
The cost records for September will show:
On September 1, the estimates for the month were:
$\begin{array}{lrr} \text { Manufacturing overhead. } &£ 17,000\\ \text {Direct Labour hours. } &13,600\\\end{array}$

During September, the actual results were:
$\begin{array}{lrr} \text { Manufacturing overhead} &£ 18,500\\ \text { Direct Labour hours.} &12,000\\\end{array}$

• A)Overapplied overhead of £1,500.
• B)Underapplied overhead of £1,500.
• C)Overapplied overhead of £3,500.
• D)Underapplied overhead of £3,500.

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Definitions:

Unlevered Cost

The cost of an investment that does not include the effects of borrowing or leverage.

Annual Coupon

The annual interest payment made to bondholders, calculated as a percentage of the bond's face value.

Unlevered Cost

refers to the cost of an investment or project that does not include the effect of financial leverage, showing its risk and return profile without debt.

Tax Rate

The portion of one’s earnings or a company's profits that is required to be paid to the government as tax.