Use the Information Below to Answer the Following Question(s)

question 21

Multiple Choice

Use the information below to answer the following question(s) :
Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Cooper's Bags Company sells the bags in cases of 1,000 bags. The bags come in three sizes: Large, Medium, and Small. Currently, Cooper's Bags Company uses a single plantwide overhead rate to allocate its $8,088,000 of annual manufacturing overhead. Of this amount, $2,210,000 is associated with the Large Bag line, $3,418,800 is associated with the Medium Bag line, and $2,459,200 is associated with the Small Bag line. Cooper's Bags Company is currently running a total of 40,000 machine hours; 13,000 in the Large Bag line, 15,400 in the Medium Bag line, and 11,600 in the Small Bag line. Cooper's Bags Company uses machine hours as the cost driver for manufacturing overhead costs.
-The departmental manufacturing overhead rate for the Small Bag line would be closest to

• A) $202.20 per machine hour.
• B) $212.00 per machine hour.
• C) $170.00 per machine hour.
• D) $222.00 per machine hour.

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Definitions:

Oligopoly

A market structure characterized by a small number of firms dominating the market, leading to limited competition.

Business Firms

Organizations involved in the production, distribution, or sale of goods and services for profit.

Large Firms

Companies that operate on a large scale, often having significant market power, extensive operations, and substantial revenues.

Collusion

An agreement between two or more parties, often competitors, to limit competition and manipulate prices or terms of trade to their advantage.