The Management of Pundt Corporation Would Like to Investigate the Possibility

question 20

Multiple Choice

The management of Pundt Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 15,000 machine-hours. In addition, capacity is 19,000 machine-hours and the actual level of activity for the year is 15,100 machine-hours. All of the manufacturing overhead is fixed and is $45,600 per year. For simplicity, it is assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity. It is further assumed that this is also the actual amount of manufacturing overhead for the year. A number of jobs were worked on during the year, one of which was Job K41P. This job required 140 machine-hours.
-If the company bases its predetermined overhead rate on capacity, the amount of manufacturing overhead charged to the job K41P is closest to:

• A) $336.00
• B) $422.78
• C) $389.27
• D) $399.00

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Definitions:

Development

The process of growth or progress, often referring to economic, social, psychological, or biological advancements.

Piaget

Jean Piaget, a Swiss psychologist known for his pioneering work in child development, particularly his theory of cognitive development, which explains how children construct a mental model of the world.

Psychodynamic Approach

is a perspective in psychology that emphasizes the role of the unconscious mind, inner forces, and childhood experiences in influencing behavior.

Psychoanalysis

A therapeutic approach and theory of personality developed by Sigmund Freud, focusing on unconscious motives and conflicts, and involving techniques like dream interpretation and free association.