If Duffy Company Budgets Total Overhead Costs for the Next

question 90

Multiple Choice

If Duffy Company budgets total overhead costs for the next year of $40,000 and anticipates using machine hours as the overhead allocation base, which of the following statements is true?

• A)If Duffy Company expects to use 60,000 machine hours, the predetermined overhead rate is $1.50 per machine hour.
• B)If Duffy Company expects to use 160,000 machine hours, the predetermined overhead rate is $4.00 per machine hour.
• C)If Duffy Company expects to use 80,000 machine hours, the predetermined overhead rate is $0.50 per machine hour.
• D)None of these answer choices are true

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Definitions:

Empirical Evidence

Information acquired by observation or experimentation that serves as a basis for knowledge or belief.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment.

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Tolerate Uncertainty

The ability to remain calm and functional despite not knowing the outcome of a situation or having incomplete information.