In Calculating a Predetermined Overhead Rate a Recent Trend in Automated

question 18

Multiple Choice

In calculating a predetermined overhead rate a recent trend in automated manufacturing operations is to choose an activity base related to

• A) direct labor hours.
• B) indirect labor dollars.
• C) machine hours.
• D) raw materials dollars.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a fixed dividend that is paid before any dividends are paid to common stockholders, typically without voting rights.

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends, subject to business performance.

Claim on Assets

Legal rights or interests that creditors and shareholders have on a company’s assets, usually in the event of the company's liquidation.

Fixed Dividend

A specified amount of money paid regularly by a company to its shareholders out of its profits or reserves.