A Company Has Fixed Production Overhead Costs Totalling $20,000 B) $$\begin{array} { | l | l | } \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\\hline 6.25 & 12,500\end{array}$$

question 144

Multiple Choice

A company has fixed production overhead costs totalling $20,000. The normal production level is 2,000 units per year, yielding a standard fixed overhead rate of $10.00 per unit. If the actual production level is 3,200 units, how much would be the amount of fixed overhead per unit and the amount of total fixed overhead included in inventory? Select the letter for the best answer:

• A) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 10.00 & 32,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 6.25 & 12,500
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 10.00 & 20,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \text { Fixed overhead per unit } & \text { Fixed overhead included in inventory } \\
• \hline 6.25 & 20,000 \\
• \hline
• \end{array}\]

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Definitions:

Unfair Competition

Business practices that are deemed unethical or illegal, aiming to gain an unfair market advantage.

Oligopolist

An oligopolist is a participant within an oligopoly, which is a market structure characterized by a small number of firms dominating the industry, often leading to limited competition and higher prices for consumers.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Long Run

A period of time in economics during which all factors of production and costs are variable, and all adjustments can be made within the economy.