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4. Paulson Corporation uses a predetermined overhead rate based on machine- nours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated
4. Paulson Corporation uses a predetermined overhead rate based on machine- nours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Direct materials Direct labor Advertising expense Rent on factory building Depreciation on factory equipment Indirect materials Sales salaries Insurance on factory equipment $25,000 $22,000 $15,000 $13,500 $6,500 $10,000 $28,000 $12,000 Paulson estimated that 40.000 direct labor-hours and 20,000 machine-hours would be worked during the year. The predetermined overhead rate per machine-hour will be: a. $1.60 b. $2.10 c. $1.00 d. $1.05 5. Product costs a. are also called period costs. b. are considered an asset until the finished goods are sold. c. become an expense in the period the costs are incurred. d. All of these answer choices are correct
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