When Computing the Predetermined Manufacturing Overhead Rate, Which Amount Below

question 98

Multiple Choice

When computing the predetermined manufacturing overhead rate, which amount below is most likely used in the numerator?

• A)direct labour hours
• B)estimated manufacturing overhead costs
• C)actual manufacturing overhead costs
• D)applied manufacturing overhead costs

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Definitions:

Present Value

The immediate value of a future stream of income or lump sums of money, assessed with a specific interest rate in mind.

Nominal Rate

The interest rate stated on a financial instrument, without adjustment for the full effect of compounding or inflation.

Annuity

A financial product that pays out a fixed stream of payments to an individual, often used as part of retirement strategies.

Times Interest Earned

A metric assessing a firm's capability to fulfill its debt requirements using its earnings prior to interest and taxes.