(Appendix 2B) Zackery Woodworking Corporation Produces Fine Cabinets

question 10

Multiple Choice

(Appendix 2B) Zackery Woodworking Corporation produces fine cabinets. The company uses a job-order costing system in which its predetermined overhead rate is based on capacity. The capacity of the factory is determined by the capacity of its constraint, which is an automated lathe. Additional information is provided below for the most recent month:

-If the company bases its predetermined overhead rate on capacity,then the predetermined overhead rate is closest to:

• A) $72.16 per machine-hour
• B) $70.38 per machine-hour
• C) $76.11 per machine-hour
• D) $64.78 per machine-hour

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Definitions:

Availability Heuristic

A cognitive shortcut that depends on the first examples that spring to mind when one assesses a particular topic, concept, strategy, or choice.

Framing Effect

The influence of context or the way information is presented on how it is perceived and interpreted.

Representativeness Heuristic

A mental shortcut used for making decisions or judgments, where the likelihood of an event is estimated based on how much it resembles the typical case.

Mental Set

A predisposition to approach a problem in a particular way, influenced by past experiences and learning.