Exhibit 6-9 The Average Price of Personal Computers Manufactured by MNM Company

question 20

Multiple Choice

Exhibit 6-9
The average price of personal computers manufactured by MNM Company is $1,200 with a standard deviation of $220. Furthermore, it is known that the computer prices manufactured by MNM are normally distributed.
-Refer to Exhibit 6-9. What is the minimum value of the middle 95% of computer prices?

• A)$1,768.80
• B)$1,295.80
• C)$2,400.00
• D)$768.80

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Definitions:

Predetermined Overhead Rate

The predetermined overhead rate is a rate that is calculated before a period begins, used to allocate estimated overhead costs to cost objects based on a chosen activity base.

Machine-Hours

A measure of the amount of time a machine is operated, typically used in manufacturing to determine production costs or capacity.

Predetermined Overhead Rate

A rate determined prior to the start of a period, designed for assigning anticipated overhead expenses to products or job orders, utilizing a selected activity basis for calculation.

Manufacturing Overhead

Costs in the manufacturing process that are not direct labor or materials.