Use the following to answer questions: 
-(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average fixed cost of 5 cakes?
Definitions:
Fixed Manufacturing Overhead
The set of costs associated with the production process that do not change with the level of production, including rent, salaries, and insurance.
Job-Order Costing System
A cost accounting system that accumulates manufacturing costs separately for each job or batch.
Predetermined Overhead Rate
A rate used to allocate manufacturing overhead costs to individual products or job orders, based on a pre-established criterion such as direct labor hours.
Machine-Hours
A measure of production time, representing the number of hours a machine is operated in the production of goods.
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