Gulten Started Her Career with an Annual Salary of $82,000

question 74

Multiple Choice

Gulten started her career with an annual salary of $82,000 in 2006.Five years later,in 2011,her salary had increased to $85,000 a year.If the values of the CPI (with a base of 1982-1984) for 2006 and 2011 are 201.6 and 224.9,respectively,compute the increase in Gulten's real income.

• A)-7.08 percent
• B)3.66 percent
• C)15.68 percent
• D)92.92 percent

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Definitions:

Predetermined Overhead Rate

A calculated estimate used for allocating overhead costs to products or services, based on an established measure such as labor hours or machine usage, facilitating budgeting and financial planning.

Activity-Based Costing

A strategy for attributing overhead and indirect expenditures to associated services and products, determined by the activities demanded by each.

Estimated Overhead Cost

An approximation of the indirect costs associated with production, used for budgeting and pricing purposes.

Activity Cost Pools

Activity Cost Pools are aggregations of all the costs associated with particular activities used in activity-based costing to allocate overhead costs more accurately.