The Manufacturing Overhead Budget at Pendley Corporation Is Based on Budgeted

question 50

Multiple Choice

The manufacturing overhead budget at Pendley Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,900 direct labor-hours will be required in August. The variable overhead rate is $5.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $133,500 per month, which includes depreciation of $30,260. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be:

• A)$5.50
• B)$17.10
• C)$20.50
• D)$15.00

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Definitions:

Discontinued Operations

Components of a business, such as a department or segment, that have been disposed of or sold.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs, indicating the company's overall profitability.

Discontinued Operations

Components of a business that have been sold or abandoned and are reported separately in the financial statements to give a clearer picture of ongoing operations.

Component

A distinct and often smaller part of a larger system, that contributes to the overall functionality or structure of that system.