Daguio Corporation Uses Direct Labor-Hours in Its Predetermined Overhead Rate

question 144

Multiple Choice

Daguio Corporation uses direct labor-hours in its predetermined overhead rate.At the beginning of the year,the total estimated manufacturing overhead was $224,580.At the end of the year,actual direct labor-hours for the year were 18,200 hours,manufacturing overhead for the year was underapplied by $12,100,and the actual manufacturing overhead was $219,580.The predetermined overhead rate for the year must have been closest to:

• A)$11.40 per machine-hour
• B)$12.34 per machine-hour
• C)$12.06 per machine-hour
• D)$10.53 per machine-hour

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Definitions:

Everyday Low Pricing

A pricing strategy where a retailer consistently offers products at low prices rather than relying on sales or discounts, aimed at attracting price-sensitive customers.

Markdowns

Reductions from the original or retail price of goods, usually to stimulate sales or clear out inventory.

Retail Pricing Strategy

Approaches and tactics a retailer uses to set the prices of its products or services to maximize profitability.

Inventory

The total amount of goods and materials held in stock by a business, warehouse, or store.