MANAGERIAL ACCT FOR MANAGERS LL\AC
MANAGERIAL ACCT FOR MANAGERS LL\AC
5th Edition
ISBN: 9781265872298
Author: Noreen
Publisher: MCG
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Chapter 6, Problem 6.10E
To determine

Concept Introduction:

Managerial decisions include decisions to make or buy a product. In this decision, the company considers the relevant costs for both the options. Make option may involve some irrelevant costs that must be eliminated to calculate relevant cost of the make option.

The financial advantage (disadvantage) of making the product instead of buying from another supplier.

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Kahlo Industries uses a predetermined factory overhead rate based on direct labor-hours. For October, Kahlo's budgeted overhead was $180,000 based on a budgeted volume of 15,000 direct labor-hours. Actual overhead amounted to $192,000, with actual direct labor-hours totaling 14,200. Required: What was over- or underapplied manufacturing overhead in October?
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