(Appendix 10A) Arca Incorporated Makes a Single Product--A Critical Part

question 72

Multiple Choice

(Appendix 10A) Arca Incorporated makes a single product--a critical part used in commercial airline seats. 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 fixed component of the predetermined overhead rate is closest to:

• A) $8.25 per machine-hour
• B) $12.38 per machine-hour
• C) $5.69 per machine-hour
• D) $8.54 per machine-hour

---

Definitions:

Oil-Spill Clean Up

The process and activities involved in removing or minimizing oil contaminants from the environment following an oil spill.

Equipment Damage Prevention

Strategies and practices aimed at reducing the likelihood of damage to machinery and equipment.

Environmental Management Accounting

The identification, collection, estimation, analysis, internal reporting, and use of materials and energy flow information, environmental cost information, and other cost information for both conventional and environmental decision-making within an organization.

Life Cycle Costing

An analysis method that considers all costs associated with the acquisition, use, maintenance, and disposal of an asset over its entire life.