Figure 4-1 The Foremost Company Predicted Factory Overhead for 2016 and 2017

question 34

Multiple Choice

Figure 4-1
The Foremost Company predicted factory overhead for 2016 and 2017 would be $120,000 for each year. The predicted activity for 2016 and 2017 were 30,000 and 20,000 direct labor hours, respectively. Additional data are as follows:
The company assumes that the long-run normal production level is 20,000 direct labor hours per year. The actual factory overhead cost for the end of 2016 and 2017 was $120,000. Assume that it takes one direct labor hour to make one finished unit.
-Refer to Figure 4-1. When the normal factory overhead rate is used, the gross profits for 2016 and 2017, respectively, are

• A) $80,000 and $80,000.
• B) $200,000 and $200,000.
• C) $120,000 and $140,000.
• D) $100,000 and $100,000.

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Definitions:

Predict

The act of forecasting future events or behaviors based on current or past data.

Construct's Range

Construct's range refers to the spectrum or extent of phenomena that a theoretical concept or psychological construct can explain or cover.

Relevance

The quality or state of being closely connected or appropriate to the matter at hand, often used in discussions of information, research findings, or arguments.

Needs

Fundamental requirements or necessities for physical and psychological well-being, such as food, shelter, esteem, and belonging.