Figure 4-1 Adams Company predicted factory overhead for 2010 and 2011 would be $120,000 for each year.The predicted activity for 2010 and 2011 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 2009 and 2010 was $120,000.Assume that it takes one direct labor hour to make one finished unit.
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Refer to Figure 4-1.When the normal factory overhead rate is used, the gross profits for 2010 and 2011, 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.

Question

Figure 4-1 Adams Company predicted factory overhead for 2010 and 2011 would be $120,000 for each year.The predicted activity for 2010 and 2011 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 2009 and 2010 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 2010 and 2011, 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.

Quizplus · Accepted Answer

The Answer of Figure 4-1 Adams Company predicted factory overhead for 2010 and 2011 would be $120,000 for each year.The predicted activity for 2010 and 2011 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 2009 and 2010 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 2010 and 2011, 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.

Figure 4-1 Adams Company Predicted Factory Overhead for 2010 and 2011