The Murray Corporation Makes and Sells a Single Product

question 5

Multiple Choice

The Murray Corporation makes and sells a single product. The company recorded the following activity and cost data for May: The fixed component of the predetermined overhead rate is $0.95 per direct labor-hour. The amount of fixed manufacturing overhead cost applied to work in process during May was:

• A)$61,725
• B)$62,700
• C)$42,750
• D)$64,125

---

Definitions:

Natural Monopoly

A market structure where a single provider is more efficient in supplying the entire market with a product or service, due to high fixed or startup costs.

Average-Cost Curve

The average-cost curve represents the total cost of production divided by the quantity of output produced, showing how the average cost per unit of product changes with changes in output level.

Government Regulation

Rules or laws established by governments to control or manage specific activities, businesses, or industries.

Economies of Scale

The economic gains achieved by companies through their large-scale operations, which lead to a reduction in the cost per unit as the scale of operation increases.