Davis Corporation Is Preparing Its Manufacturing Overhead Budget for the Fourth

question 20

Multiple Choice

Davis Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $1.70 per direct labor-hour; the budgeted fixed manufacturing overhead is $116,000 per month, of which $30,000 is factory depreciation.
-If the budgeted direct labor time for December is 4,000 hours,then the predetermined manufacturing overhead per direct labor-hour for December would be:

• A) $9.20
• B) $30.70
• C) $23.20
• D) $1.70

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Definitions:

Phillips Curve

An economic theory that suggests an inverse relationship between the rate of unemployment and the rate of inflation in an economy.

Sacrifice Ratio

A measure of the economic costs of reducing inflation, often represented by the loss of output or employment.

Friedman and Phelps

Economists known for their work on the natural rate of unemployment and expectations in macroeconomics, challenging the traditional Phillips curve concept.

Phillips Curve

An economic concept that depicts an inverse relationship between the rate of unemployment and the rate of inflation in an economy over time.