Figure 2-5 Shows Monthly Average (Per Unit)production Costs for Producing

question 60

Multiple Choice

Figure 2-5 shows monthly average (per unit) production costs for producing Good X. FIGURE 2-5 Refer to Figure 2-5.What is the slope of this non-linear function when 600 units per month are being produced?

• A)-2
• B)4
• C)-4
• D)1
• E)-1

---

Definitions:

Predetermined Overhead Rate

This is a rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to products.

Machine-Hours

A measure of the amount of time machinery is in operation, commonly used as a basis for allocating machine related costs to products.

Manufacturing Overhead

All indirect costs associated with the production process, including equipment maintenance, utilities, and factory management salaries.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, based on a planned level of activity.