Compton Corporation
the Following Overhead Cost Information Is Available for Compton

question 53

Multiple Choice

Compton Corporation
The following overhead cost information is available for Compton Corporation for 2006:
$$\begin{array} { l l c } \text { Activity } & \text { Allocation Base } & \text { Overhead Cost } \\\hline \text { Purchasing } & \text { Number of purchase orders } & \$ 100000 \\\text { Receiving } & \text { Number of shipments received } & 60000 \\\text { Machine setups } & \text { Number of setups } & 150000 \\\text { Quality control } & \text { Number of inspections } & 50000\end{array}$$
During the year, 5000 purchase orders were issued; 20 000 shipments were received; 3000 machine setups were performed; and 4000 inspections were conducted.
-What is the overhead rate for the purchasing activity?

• A) $ .05
• B) $20.00
• C) $72.00
• D) $ 3.13

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Definitions:

Indonesian Earthquake

A seismic event occurring in Indonesia, a country prone to earthquakes due to its location on the Pacific "Ring of Fire."

Tsunami

A large sea wave produced by uplift, subsidence, or some other disturbance of the seafloor, especially by a shallow submarine earthquake.

Poor Construction

Refers to building structures that lack the necessary quality, standards, or materials, often leading to structural failures or hazards.

Earthquake Depths

Refers to the distance below the Earth's surface where an earthquake originates, which can influence the intensity and damage caused at the surface.