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

question 111

Multiple Choice

Paulson Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs.The Corporation has provided the following estimated costs for next year: Paulson estimated that 40,000 direct labor-hours and 20,000 machine-hours would be worked during the year.The predetermined overhead rate per machine-hour will be:

• A)$1.60
• B)$2.10
• C)$1.00
• D)$1.05

---

Definitions:

Customer's Account

Refers to the record of transactions, credits, debits, and financial activities between a customer and a company.

90-Day Note

A short-term financial obligation or debt security with a maturity period of 90 days, often used for temporary financing needs.

Matures

The point in time when a financial instrument, such as a bond or loan, reaches its due date and must be repaid or redeemed.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned over during a specific period, often used to assess the effectiveness of credit and collection policies.