Hamilton Pty Ltd Uses a Standard Costing System for Product

question 47

Multiple Choice

Hamilton Pty Ltd uses a standard costing system for product costing.The company uses direct labour hours as the cost driver to apply overhead costs.The following amounts were budgeted for the year:
The following were the actual results:
Calculate the total amount of underapplied or overapplied manufacturing overhead.

• A) $80 000 underapplied
• B) $64 000 underapplied
• C) $50 000 overapplied
• D) $24 000 underapplied

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Definitions:

Fundamental Breach

A serious violation of a contract that allows the aggrieved party to terminate the agreement and sue for damages.

Tendered Payment

The act of offering money or payment to fulfill a debt or obligation, especially within the context of fulfilling contractual agreements.

Liquidated Damages

Pre-determined damages agreed upon by the parties involved in a contract, to be paid if one party breaches the contract.

Breach of Warranty

The failure to fulfill the terms of a promise or claim made about the quality or condition of a product or service.