Bakos Corporation Bases Its Predetermined Overhead Rate on Variable Manufacturing

question 42

Multiple Choice

Bakos Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $8.80 per machine-hour and fixed manufacturing overhead cost of $100,688 per period. If the denominator level of activity is 2,800 machine-hours, the variable component in the predetermined overhead rate would be:

• A)$44.76
• B)$35.96
• C)$43.52
• D)$8.80

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Definitions:

Inflation

An increase in the general price level of goods and services in an economy over a period of time.

Cost-Push Inflation

Inflation resulting from a rise in the cost of inputs such as labor, raw materials, and so forth, which subsequently reduces the availability of these goods.

Aggregate Demand Curve

A graphical representation showing the total demand for all goods and services in an economy at different price levels.

Aggregate Supply Curve

A graphical representation that shows the total quantity of goods and services producers are willing to supply at different price levels in an economy.