Prevor Corporation Reports the Following Account Balances at the End

question 108

Multiple Choice

Prevor Corporation reports the following account balances at the end of its first year of operation: Prevor's total assets equal:

• A)$70,500.
• B)$72,500.
• C)$205,500.
• D)$22,500.
• E)$106,000.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, depreciation on equipment, and factory rent.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to products based on a selected activity base such as machine hours or labor hours.

Direct Labor-Hours

The full extent of hours dedicated by employees who are directly integrated into the production process.

Manufacturing Overhead

All indirect factory-related costs incurred during the production process, excluding direct materials and direct labor costs.