If the Company Bases Its Predetermined Overhead Rate on Capacity

question 28

Multiple Choice

If the company bases its predetermined overhead rate on capacity, the amount of manufacturing overhead charged to the job B04D is closest to:

• A)$1,566.00
• B)$1,551.46
• C)$1,883.91
• D)$1,392.00

---

Definitions:

Adjusting Entry

An amended bookkeeping entry made to rectify or allocate transactions to the appropriate accounting period or ensure that revenues and expenses are recorded in the period they occur.

Doubtful Accounts

Accounts receivable that a company believes might not be collected due to credit risk.

Allowance Method

An accounting technique used to estimate and anticipate uncollectible accounts receivable and bad debts.

Reinstated Account

An account previously closed or inactivated that has been restored to active status.