(Appendix 10A) Stopyra Incorporated Makes a Single Product--A Cooling Coil

question 20

Multiple Choice

(Appendix 10A) Stopyra Incorporated makes a single product--a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

-If the denominator level of activity is 7,600 machine-hours,the predetermined overhead rate would be:

• A) $1,900.00 per machine-hour
• B) $19.00 per machine-hour
• C) $189.75 per machine-hour
• D) $208.75 per machine-hour

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Definitions:

Penetration Pricing

A strategy where businesses set a low price for a new product or service to attract customers and gain market share quickly, intending to raise prices later.