Consider the Following Decision Option Data What Is the Best Choice?
A)Option #1
B)Option #2
C)Option

question 8

Multiple Choice

Consider the following decision option data: $\begin{array}{lll}&\text { Option \#1 } & \text { Option \#2 } \\\text { Number of units } & 150 & 200 \\\text { Revenue per unit } & \$ 25 & \$ 25 \\\text { Cost per unit } & \$ 12 & \$ 12 \\\text { Lost Revenue from choosing option } & \{\$ 500\} & \{\$ 4,000\} \\\text { Cost saving from choosing option } & \$ 0 & \$ 1,000 \\\text { Avo idable Fixed Cost } & \$ 0 & \$ 0\end{array}$ What is the best choice?

• A)Option #1
• B)Option #2
• C)Option #1 and Options #2 are equally good choices.
• D)Neither Option #1 nor Option #2 should be chosen

Analyze the impact of estimated total manufacturing overhead costs on departmental budgets.

Estimate total manufacturing overhead for departments and entire plants.

Understand the difference between variable and fixed manufacturing overhead costs and their implications on overhead rates.

Calculate and understand the significance of plantwide predetermined overhead rates.

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