A Company's Predetermined Overhead Rate Is 130% of Direct Labor

question 24

Short Answer

A company's predetermined overhead rate is 130% of direct labor cost.How much overhead would be allocated to a job that required total direct labor costs of $60,000?

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Definitions:

MPC

Marginal Propensity to Consume, the proportion of additional income that a consumer spends on purchasing goods and services, rather than saving.

GDP

Gross Domestic Product, the total value of all goods and services produced within a country's borders in a specific time period, indicating the size of its economy.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit.

MPC

Marginal Propensity to Consume, the fraction of additional income that is spent on consumption.