Business, 21.10.2020 16:01 diyagawande

Explain how shaving 5% off the estimated direct labor-hours in the base for the predetermined overhead rate usually results in a big boost in net operating income at the end of the fiscal year. Note: This case does not give the estimated overhead, but it may be easier to explain what is going on here if you make up an estimated overhead number and calculate the predetermined overhead rate using the expected labor hours and then recalculate the predetermined overhead rate using the "shaved" labor hours. 2. What are the possible alternatives for Jennifer in this situation? 3. Should Jennifer go along with the general manager's request to reduce the direct labor-hours in the predetermined overhead rate computation to 105,000 direct labor-hours? Why or why not?

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