Magnum Company uses direct labor cost as a basis for computing its predetermined overhead rate....
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Accounting
Magnum Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for 2020, the company misclassified a portion of direct labor cost as indirect labor. The effect of this misclassification will be to:
understate the predetermined overhead rate.
overstate the predetermined overhead rate.
there will be no effect on the predetermined overhead rate.
Can't tell from the information provided.
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