Secrease Corporation Uses Machine-Hours as the Allocation Base for Applying

question 100

Multiple Choice

Secrease Corporation uses machine-hours as the allocation base for applying its manufacturing overhead.
$\begin{array}{|l|r|}\hline \begin{array}{l}\text { Estimated manufacturing overhead cost } \\\text { for the year }\end{array} & \$ 594,000 \\\hline \text { Capacity } & 110,000 \text { machine-hours } \\\hline\text { Estimated amount of the allocation base } \\\text { for the year }&108,000 \text { machine-hours }\\\hline \text { Amount of the allocation base for the } & 88,000 \text { machine-hours } \\\text { actual output of the year } & \\\hline \begin{array}{l}\text { Actual manufacturing overhead cost for } \\\text { the year }\end{array} & \$ 589,000 \\\hline\end{array}$ All of the company's manufacturing overhead is fixed.

- What is the predetermined overhead rate based on capacity to 2 decimal places?

• A) $5.35
• B) $6.69
• C) $5.50
• D) $5.40

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Definitions:

Gustav Fechner

A German philosopher, physicist, and experimental psychologist who founded psychophysics, studying the relationship between the physical properties of stimuli and the sensations they produce.

Psychological Sensation

The subjective experience or perception of a stimulus through the mind's interpretation of sensory information.

Physical Stimulus

A tangible or material factor that can prompt a physical reaction in an organism.

Just-Noticeable Difference

The smallest change in stimulus intensity that can be detected, underlining the threshold at which a change is perceptible.