Derbyshire Ltd Distributes Overhead Based on Direct Labour Dollars

question 10

Multiple Choice

Derbyshire Ltd distributes overhead based on direct labour dollars. The estimated manufacturing overhead for the year was $800 000 and the estimated direct labour dollars for the year were $160 000. Indicate the amount of underapplied or overapplied overhead if actual direct labour was $135 000 and actual manufacturing overhead was $658 000.

• A) $17 000 underapplied
• B) $17 000 overapplied
• C) $25 000 overapplied
• D) $25 000 underapplied

Prepare and understand the statement of stockholders' equity.

Identify and classify accounts as assets, liabilities, or stockholders' equity.

Understand transactions that affect stockholders' equity and their impact.

Prepare and interpret an income statement.

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Definitions:

Recessions

Periods of economic decline marked by falling GDP and other economic indicators, often resulting in higher unemployment rates.

Office Machines

Equipment used in an office environment for administrative or clerical tasks, such as printers, copiers, and computers.

Depreciation

The reduction in the value of an asset over time, typically due to wear and tear, obsolescence, or market conditions.

Net Investment

The total spending on new capital minus depreciation on existing capital within a given period.