Dalrymple Company Produces a Special Spray Nozzle

question 10

Multiple Choice

Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $68,750. The budgeted number of nozzles to be inserted is 11,000. What is the budgeted indirect cost allocation rate for this activity?

• A) $0.16
• B) $0.32
• C) $1.16
• D) $6.25

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Definitions:

WACC

Weighted Average Cost of Capital; a calculated average of the cost of equity and the cost of debt that a company uses to finance its operations, weighted based on the proportion of each finance source in the company's capital structure.

Capital Structure

Capital structure is the mixture of debt and equity that a company uses to finance its operations and growth.

Coupon Rate

The yearly percentage yield from a bond, measured against its nominal value.

Market Price

The current price at which a service or asset can be bought or sold in the market.