Karvel Corporation uses machine hours as the basis for allocating manufacturing overhead costs to production. For the month of August, Karvel estimated total manufacturing overhead costs at GH¢300,000 and total machine hours at 75,000 hours. Actual results for the period were total manufacturing overhead costs of GH¢290,000 and total machine hours of 75,000 hours. As a result of this outcome, Karvel would have A. applied more overhead to Work in Process than the actual amount of overhead cost for the year. B. applied less overhead to Work in Process than the actual amount of overhead cost for the year. C. applied an amount of overhead to Work in Process that was equal to the actual amount of overhead. D. found it necessary to recalculate the predetermined overhead rate.

Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
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Karvel Corporation uses machine hours as the basis for allocating manufacturing overhead costs to production. For the month of August, Karvel estimated total manufacturing overhead costs at GH¢300,000 and total machine hours at 75,000 hours. Actual results for the period were total manufacturing overhead costs of GH¢290,000 and total machine hours of 75,000 hours. As a result of this outcome, Karvel would have
A. applied more overhead to Work in Process than the actual amount of overhead cost for the year.
B. applied less overhead to Work in Process than the actual amount of overhead cost for the year.
C. applied an amount of overhead to Work in Process that was equal to the actual amount of overhead.
D. found it necessary to recalculate the predetermined overhead rate.

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