Emco company uses direct labor cost as a basis for computing its predetermined overhead rate. in computing the predetermined overhead rate for last year, the company included in direct labor cost a portion of indirect labor. the effect of this misclassification will be to select one: a. have no effect on the predetermined overhead rate. b. understate the predetermined overhead rate. c. overstate the predetermined overhead rate d. this cannot be determined from the information given.

b. understate the predetermined overhead rate

Explanation:

The rate is determinate by distributing the expected cost over the cost driver

In this case labor cost.

as this value is higher than it should

(labor + some indirect)

the result of the division will be lower thus, the overhead rate is lower than it should be without the mistake.

answer; ///i believe that the correct answer is (a); change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile