If Expected Factory Overhead Costs Are $300 000 and Expected

question 1

Multiple Choice

If expected factory overhead costs are $300 000 and expected direct labour hours are 25 000, what is the overhead application rate per direct labour hour?

• A) $0.08
• B) $12.00
• C) $83.00
• D) $120.00

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Definitions:

Adjusting Entries

Entries made in accounting books at the end of the cycle to rightly allocate the period's earnings and financial outgoings.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the loss of value over time.

Notes Payable

Financial obligations or loans evidenced by promissory notes, to be repaid to the creditor at future dates.

Prepaid Insurance

An asset account on the balance sheet representing insurance payments made in advance for future coverage periods.