Karvel Corporation Uses a Predetermined Overhead Rate Based on Machine-Hours

question 160

Multiple Choice

Karvel Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. For the month of August, Karvel estimated total manufacturing overhead costs at $300,000 and total machine-hours at 75,000 hours. Actual results for the period were manufacturing overhead costs of $290,000 and 75,000 machine-hours. As a result, Karvel would have:

• A) applied more overhead to Work in Process than the actual amount of overhead cost for the year.
• B) applied less overhead to Work in Process than the actual amount of overhead cost for the year.
• C) applied an amount of overhead to Work in Process that was equal to the actual amount of overhead.
• D) found it necessary to recalculate the predetermined overhead rate.

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The process of increasing in number or quantity, often used in the context of cells dividing or investment growth.

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The mathematical process of combining two or more quantities to get a total or sum.

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The act of receiving something from someone with the intention of returning it or its equivalent later.