Acti Manufacturing Corporation Is Estimating the Following Raw Material Purchases

question 178

Multiple Choice

Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:
At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase.
-The company recomputes its predetermined overhead rate every month.The predetermined overhead rate for October should be:

• A) $4.60 per direct labor-hour
• B) $21.50 per direct labor-hour
• C) $20.30 per direct labor-hour
• D) $16.90 per direct labor-hour

---

Definitions:

Bakery

A place where bread, cakes, cookies, and other bakery products are made or sold.

Gross Domestic Product

The total monetary value of all final goods and services produced within a country's borders in a specific time period.

Consumer Goods

Products and services that satisfy the needs and wants of consumers directly.

Capital Goods

Goods that are used in producing other goods, rather than being bought by consumers directly.