Crimp Corporation Uses Direct Labor-Hours in Its Predetermined Overhead Rate

question 147

Multiple Choice

Crimp Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 15,000 hours and the total estimated manufacturing overhead was $258,000. At the end of the year, actual direct labor-hours for the year were 13,100 hours and the actual manufacturing overhead for the year was $253,000. Overhead at the end of the year was:

• A) $27,680 overapplied
• B) $32,680 overapplied
• C) $27,680 underapplied
• D) $32,680 underapplied

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Definitions:

Symbolic Thinking

The ability to use symbols, signs, or objects to represent something else, a critical aspect of language development and abstract thought.

Preoperational Stage

A development stage in early childhood according to Piaget, characterized by symbolic thinking and difficulty understanding other perspectives.

Average North American

could refer to statistical norms or characteristics typically observed among the population of North America, such as average income, education level, or lifestyle.

Irreversibility

A characteristic of processes that cannot be reversed, meaning once they occur, the state of the system cannot be returned to its original state.