Kiker Incorporated Makes a Single Product--An Electrical Motor Used in Many

question 71

Multiple Choice

Kiker Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below:
The predetermined overhead rate is closest to:

• A) $9.57 per machine-hour
• B) $12.11 per machine-hour
• C) $7.57 per machine-hour
• D) $15.32 per machine-hour

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Definitions:

Noncash Financing

Activities that increase long-term liabilities or equity but do not involve the immediate receipt or payment of cash, such as issuing stock or converting debt to equity.

Retirement Of Debt

The process through which a company repays or otherwise settles its outstanding debts.

Note Payable

A written promise to pay a specified amount of money, often with interest, by a certain date.

Common Stock

Shares issued by a corporation representing partial ownership in the company, entitling holders to vote on corporate matters.