The Management of Bullinger Corporation Would Like to Investigate the Possibility

question 320

Multiple Choice

The management of Bullinger Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 28,000 machine-hours. Capacity is 31,000 machine-hours and the actual level of activity for the year is assumed to be 26,700 machine-hours. All of the manufacturing overhead is fixed and both the estimated amount at the beginning of the year and the actual amount at the end of the year are assumed to be $42,560 per year. For simplicity, it is assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity. It is further assumed that this is also the actual amount of manufacturing overhead for the year.If the company bases its predetermined overhead rate on capacity, what would be the cost of unused capacity reported on the income statement prepared for internal management purposes? (Round intermediate calculations to 2 decimal places.)

• A) $3,540.00
• B) $4,005.00
• C) $1,976.00
• D) $5,981.00

Grasp the concept of proofreading and its critical role in removing typographical errors from written documents.

Understand the importance of the revision process in refining ideas and improving the quality of writing.

Recognize the value of specific word choice in conveying precise meanings and enhancing the impact of communication.

Understand the legal and practical implications of the Plain Writing Act for public and business documents.

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Definitions:

Psychic Energy

In psychoanalytic theory, the energy produced by instinctual drives and processes, which powers the mind and motivates behavior.

Repressed Emotions

Emotions that have been unconsciously hidden away by an individual to avoid dealing with the stress or trauma associated with them.

Displacement

A psychological defense mechanism where emotional responses are transferred from their original source to a safer or more acceptable object or person.

Secondary Gain

The advantage or benefit a person unconsciously gains from maintaining their illness or ailment.