Morisey Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing

question 35

Multiple Choice

Morisey Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $8.60 per machine-hour and fixed manufacturing overhead cost of $457,002 per period.If the denominator level of activity is 6,300 machine-hours,the predetermined overhead rate would be:

• A)$81.14
• B)$860.00
• C)$72.54
• D)$8.60

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Definitions:

Perfectly Inelastic

A scenario where the quantity demanded or supplied of a good does not change regardless of changes in its price.

Price Range

The spread between the highest and lowest selling price of a good or service in a particular market over a certain period of time.

Supply

The total amount of a product or service that is available for purchase at a given price over a specific time period.

Perfectly Inelastic

A situation in demand where the quantity demanded does not change in response to changes in price.