In Determining the Cost of Inventory,department M's Indirect Costs Are

question 54

Multiple Choice

In determining the cost of inventory,department M's indirect costs are allocated using machine hours as the cost driver.If department M's indirect costs total $850 000 and it expects to use 52 000 machine hours for the period,the indirect cost rate for the department is:

• A) there is insufficient information to determine the indirect cost rate for the department.
• B) $0.061 per machine hour.
• C) $16.346 per machine hour.
• D) none of the options are correct.

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Definitions:

Market System

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, with prices serving as signals to participants.

Circular Flow Diagram

An illustration showing the flow of resources from households to firms and of products from firms to households. These flows are accompanied by reverse flows of money from firms to households and from households to firms.

Revenue

Revenue is the total amount of money received by a company for goods sold or services provided during a certain period of time, before any expenses are deducted.

Expenditures

The total amount of money spent by a household or country on consumption and services.