(Appendix 3A) Secrease Corporation Uses Machine-Hours as the Allocation Base

question 43

Multiple Choice

(Appendix 3A) Secrease Corporation uses machine-hours as the allocation base for applying its manufacturing overhead.
$\begin{array}{lr}\text { Estimated manufacturing overhead cost for the year } & \$ 594,000 \\\text { Capacity } & 110,000 \text { machine-hours } \\\text { Estimated amount of the allocation base for the year } & 108,000 \text { machine-hours } \\\text { Amount of the allocation base for the actual output } & \\\text { of the year } & \$ 8,000 \text { machine-hours } \\\text { Actual manufacturing overhead cost for the year } & \$ 589,000\end{array}$
All of the company's manufacturing overhead is fixed.
-(Appendix 3A) What is the predetermined overhead rate based on capacity to the nearest whole cent?

• A) $5.35
• B) $6.69
• C) $5.50
• D) $5.40

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Definitions:

Epidermis

The outermost layer of cells in plants and animals, serving as a protective barrier against environmental damage.

Cuticle

A protective and waterproof outer layer of a plant or arthropod, composed of organic material and often preventing water loss.

Vascular Cambium

Vascular cambium is a layer of dividing cells in plants, located between the xylem and phloem, responsible for the secondary growth that increases the thickness of stems and roots.

Xylem

The vascular tissue in plants responsible for the conduction of water and minerals from the roots to the leaves and shoots.