Sheeder Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing

question 52

Multiple Choice

Sheeder Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $18.70 per machine-hour and fixed manufacturing overhead cost of $1,817,202 per period. If the denominator level of activity is 8,200 machine-hours, the fixed element in the predetermined overhead rate would be:

• A) $18.70
• B) $1,870.00
• C) $240.31
• D) $221.61

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Definitions:

Validity Error

A discrepancy or mistake that affects the accuracy or truthfulness of a test's results.

Content Validity

The extent to which a test or measure represents all facets of a given construct or domain.

Given Construct

A given construct refers to a specific concept or theoretical idea that is established and used as a basis for research or analysis.

Content Validity Ratio

A ratio of the number of raters who evaluate an item and the number of raters who deem an item to be an essential component of the construct being measured.