(Appendix 4B)The Management of Benedict Corporation Would Like to Investigate

question 12

Multiple Choice

(Appendix 4B) The management of Benedict Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity.The company's controller has provided an example to illustrate how this new system would work.In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 29, 000 machine-hours.In addition, capacity is 36, 000 machine-hours and the actual level of activity for the year is 26, 600 machine-hours.All of the manufacturing overhead is fixed and is $334, 080 per year.For simplicity, it is assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity.It is further assumed that this is also the actual amount of manufacturing overhead for the year.A number of jobs were worked on during the year, one of which was Job B04D.This job required 150 machine-hours. If the company bases its predetermined overhead rate on the estimated amount of the allocation base for the upcoming year, the predetermined overhead rate is closest to:

• A)$11.52
• B)$12.56
• C)$9.28
• D)$10.34

Grasp key concepts and methods of marketing strategy, including market segmentation and relationship marketing.

Familiarize with the impact of marketing eras on business strategies and practices.

Understand the concepts and calculations related to the cost of equity and the impact of leverage.

Calculate and interpret the debt-equity ratio and its significance for a firm's financial structure.

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Definitions:

Distributor

An intermediary entity in the supply chain that buys products from manufacturers or wholesalers and sells them to retailers or direct to consumers.

Lot Sizing Decisions

The process of determining the optimal order quantity that minimizes total inventory costs, including ordering, holding, and stockout costs.

Fixed Costs

Expenses that do not change in the short term, regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Quantity Discounts

Reductions in price per unit based on the amount of goods purchased, used as an incentive for buyers to purchase larger quantities.