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Question 1: Gratis Company Ltd applies overhead based on direct labour hours in their printing department. At the beginning of the year, the company estimated that manufacturing overhead would be $550 000, direct labour hours would be 100 000 and direct labour cost would be $1 100 000 in the printing department. What is the printing department's predetermined overhead rate for the year?
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Evaluate the Predetermined Overhead Rate
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A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.
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