Simplex Company Has the Following Estimated Costs for Next Year

question 16

Multiple Choice

Simplex Company has the following estimated costs for next year:
$\begin{array}{|l|r|}\hline \text { Direct materials } & \$ 15,000 \\\hline \text { Direct labour } & 55,000 \\\hline \text { Sales commissions } & 75,000 \\\hline \text { Salary of production supervisor } & 35,000 \\\hline \text { Indirect materials } & 5,000 \\\hline \text { Advertising expenses } & 11,000 \\\hline \text { Rent on factory equipment } & 16,000 \\\hline\end{array}$
Simplex estimates that 10,000 direct labour and 16,000 machine hours will be worked during the year.If overhead is applied on the basis of machine hours,what will be the overhead rate per hour?

• A) $3.50.
• B) $6.94.
• C) $7.63.
• D) $8.56.

---

Definitions:

Bad Tendency Rule

Legal doctrine that permits the restriction of freedom of speech if the speech in question has a tendency to incite crime or disturb the public peace.

Strict Scrutiny Test

A form of judicial review that courts use to determine the constitutionality of certain laws, requiring the law to be narrowly tailored to serve a compelling governmental interest.

Clear And Present Danger Test

A legal standard that determines under what circumstances limits can be placed on First Amendment freedoms of speech, press, or assembly.

Necessary And Proper Test

A constitutional doctrine that allows Congress to make laws deemed necessary and proper for executing its enumerated powers.