Assume that Bene Petit uses a volume$-$based cost system that applies indirect costs $($i$.$e$.,$ overhead$)$ based on the number of customer meals delivered. At the beginning of the year, accountants estimated indirect cost at $$24,000$ and expected to deliver $32,000$ customer meals. The company actually delivered $25,000$ customer meals and incurred indirect cost of

$$25,000.$ What is the predetermined overhead rate? How much is overhead applied? How much is over or underapplied overhead? If Bene Petit recorded $$125,000$ in Sales Revenue and reported an unadjusted Cost of Good Sold of $$75,000($before the adjustment for over or underapplied overhead$),$ how much is Adjusted Gross Profit?

Answer rating: 100% (QA)

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