Hairr Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing

question 87

Multiple Choice

Hairr Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $9.50 per machine-hour and fixed manufacturing overhead cost of $947,672 per period. If the denominator level of activity is 8,900 machine-hours, the predetermined overhead rate would be:

• A)$9.50
• B)$115.98
• C)$106.48
• D)$950.00

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Definitions:

Opportunity Costs

The price paid by not choosing the second-best option available during decision-making.

Capital Goods

Physical assets such as machinery and buildings used by businesses to produce goods and services over time.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, indicating an improvement in the country's economic health.

Resource Allocation

The process of distributing available resources among various competing needs or uses in order to achieve desired objectives.