1)A company's relevant range of production is 10,000 to 15,000 units. When it produces and sells 12,000 units, its unit costs are as follows:

	Amount per Unit
Direct materials	$ 8.50
Direct labor	$ 5.50
Variable manufacturing overhead	$ 1.50
Fixed manufacturing overhead	$ 5.00
Fixed selling expense	$ 3.50
Fixed administrative expense	$ 2.00
Sales commissions	$ 1.00
Variable administrative expense	$ 0.50

What is the incremental cost incurred if the company increases production from 12,000 to 12,001 units?

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Multiple Choice

• $22.00
• $27.50
• $15.50
• $20.50

2)Which of the following statements is true regarding the formula used in normal costing for applying overhead cost to a specific job?

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Multiple Choice

• The actual overhead rate is multiplied by the actual amount of the allocation base used by the job.
• The predetermined overhead rate is multiplied by the estimated amount of the allocation base used by the job.

• The actual overhead rate is multiplied by the estimated amount of the allocation base used by the job.
• The predetermined overhead rate is multiplied by the actual amount of the allocation base used by the job.