Beaver Company Used a Predetermined Overhead Rate Last Year of $2

question 24

Multiple Choice

Beaver Company used a predetermined overhead rate last year of $2 per direct labor-hour, based on an estimate of 25,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were:
The underapplied or overapplied overhead last year was:

• A) $1,000 underapplied
• B) $1,000 overapplied
• C) $3,000 overapplied
• D) $2,000 underapplied

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Definitions:

Confounds

Variables that could potentially contaminate or influence the outcome of an experiment, making it hard to interpret the effects of the primary variables of interest.

Factorial Design

An experimental strategy in which factors are varied together to examine their interaction effects on a response variable.

Independent Variables

Variables that are manipulated or changed in an experiment to test their effects on dependent variables.

Dependent Variable

The variable in an experiment that is observed and measured for changes, which are thought to be influenced by the manipulation of the independent variable.