Miramar Industries Manufactures Two Products: a and B

question 47

Multiple Choice

Miramar Industries manufactures two products: A and B.  The manufacturing operation involves three overhead activities-production setup, material handling, and general factory activities.  Miramar uses activity-based costing to allocate overhead to products.  An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: What is the activity rate for production setup?

• A) $2,500 per setup
• B) $833 per setup
• C) $625 per setup
• D) $400 per setup

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Definitions:

Net Income

The net income of a company once all costs and taxes are deducted from its total revenue.

Short-Term Stock Investments

Investments in stocks that are intended to be held for a short period, typically less than one year, for earning quick profits.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed.

Mikel Company Bonds

Debt securities issued by Mikel Company to investors, representing loans made by investors to the company.