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

question 90

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) Actual overhead costs of the prior year divided by the actual amount of the cost driver or allocation base
• C) Estimated amount of the cost driver divided by the estimated total overhead costs
• D) Estimated overhead costs divided by the estimated amount of the cost driver or allocation base

---

Definitions:

Retained Earnings

The portion of net income not distributed to shareholders as dividends and instead reinvested in the business.

Stable Dividend Policy

A strategy where a company aims to distribute a consistently fixed dividend to shareholders, regardless of the year-to-year fluctuations in earnings.

Earnings Projections

Forecasts of a company's future earnings, often based on past performance, current trends, and industry analysis.

TSX Rules

The regulations and guidelines that govern trading and listing on the Toronto Stock Exchange (TSX), ensuring fair and orderly markets.