The Following Information Is Provided by the Salinger Corporation for the Year

question 118

Multiple Choice

The following information is provided by the Salinger Corporation for the year: $\begin{array}{lr}\text { Actual direct labor hours worked } & 62,100 \\\text { Budgeted overhead } & \$ 405,000 \\\text { Budgeted direct labor hours } & 50,500 \\\text { Actual overhead costs incurred } & \$ 621,000\end{array}$ Which of the following is the predetermined overhead rate, if calculated using direct labor hours? (Round the answer to two decimal places.)

• A)$1.53
• B)$6.52
• C)$8.02
• D)$12.30

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Definitions:

Negative Externalities

Costs suffered by a third party as a result of an economic transaction, which are not reflected in the transaction's market price.

Equilibrium Price

The price in the market where the amount of products available matches the amount of products wanted by consumers.

Deforestation

The clearing or thinning of forests by humans to make the land available for other uses, such as agriculture, logging, or mining, often leading to environmental concerns.

Moral Hazard

The risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.