When Calculating the Predetermined Manufacturing Overhead Rate, What Is the Correct

question 142

Multiple Choice

When calculating the predetermined manufacturing overhead rate, what is the correct basis of calculation?

• A) Estimated overhead costs divided by the number of days in a year
• B) Estimated amount of the cost driver divided by the estimated total overhead costs
• C) Actual overhead costs of the prior year divided by the actual amount of the cost driver or allocation base
• D) Estimated overhead costs divided by the estimated amount of the cost driver or allocation base

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous in consumption, meaning they can be consumed by everyone and one person's consumption does not reduce the availability for others.

Private Sector

The part of the economy that is owned and operated by individuals and companies for profit, as opposed to being owned by the government.

External Benefit

A positive effect or advantage that extends beyond the direct participants of an economic transaction to affect others who are not involved in the transaction.

First-Chair Violinist

The lead violinist in a symphony orchestra, often responsible for playing solos and leading the violin section.