-Refer to Exhibit 2-5

question 98

Multiple Choice

-Refer to Exhibit 2-5.The opportunity cost of moving from point C to point B is

• A) 15,000 televisions.
• B) 15,000 fax machines.
• C) 10,000 televisions.
• D) 20,000 fax machines.

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Definitions:

Finishing Department

The final stage in the manufacturing process where products are completed, packaged, or prepared for sale.

Predetermined Overhead Rate

A rate calculated before the period begins, based on the estimated overhead costs and estimated activity base, used to allocate overhead costs to products.

Machine-Hours

An indicator of how much output is generated in manufacturing, determined by the total hours that machinery is in use.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, based on the estimated overhead costs and estimated activity level, used to allocate overhead costs to products or services.