The Predetermined Overhead Rate Is Calculated as

question 162

Multiple Choice

The predetermined overhead rate is calculated as

• A)Budgeted total manufacturing overhead divided by budgeted activity level of application base.
• B)Budgeted total manufacturing overhead divided by actual activity level of application base.
• C)Actual total manufacturing overhead divided by budgeted activity level of application base.
• D)Actual total manufacturing overhead divided by actual activity level of application base.

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Definitions:

Economic Profit

The disparity measure in between overall returns and full expenses, including both exposed and indirect costs.

Market Supply

The total amount of a product that sellers are willing and able to sell across all relevant price levels within a given market.

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust fully to market changes.

Long-run Equilibrium

The condition in which, considering full adjustments in the market, the quantity supplied equals the quantity demanded at the prevailing market price.