Odonell Corporation Estimates That Its Variable Manufacturing Overhead Is $11

question 25

Multiple Choice

Odonell Corporation estimates that its variable manufacturing overhead is $11.20 per machine-hour and its fixed manufacturing overhead is $563,640 per period. If the denominator level of activity is 6,000 machine-hours, the variable component in the predetermined overhead rate would be:

• A)$93.94 per machine-hour
• B)$11.20 per machine-hour
• C)$105.14 per machine-hour
• D)$103.60 per machine-hour

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Definitions:

Resource Demand

The desire and ability of firms or individuals to acquire resources or inputs necessary for production, influenced by their price and productivity.

Demand Decrease

A reduction in the quantity of a product or service wanted by consumers at any given price level.

Production Function

A mathematical relationship expressing the maximum output that can be produced from a given set of inputs in the production process.

Marginal Product

The additional output that results from using one more unit of a production factor, keeping all other factors constant.