1.Simplex Company has the following estimated costs for next year:

Direct materials

$15,000

Direct labour

55,000

Sales commissions

75,000

Salary of production supervisor

65,000

Indirect materials

55,960

Advertising expenses

11,000

Rent on factory equipment

16,000

Simplex estimates that 10,000 direct labour and 16,000 machine hours will be worked during the year. If overhead is applied on the basis of machine hours, what will be the overhead rate per hour?

a.$6.94.

b.$8.56.

c.$3.50.

d.$7.63.

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2.Which of the following statements refers to management accounting information?

a.It primarily measures and records business transactions

b.The reports are generally delayed and historical

c.There are no regulations governing the reports

d.The reports are audited so they can be used in confidence by potential investors

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3.Which one of the following is a variable cost for an insurance company?

a.rent

b.sales commissions

c.property taxes

d.amortization of office equipment

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4.Costs incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

a.Organization-sustaining activities.

b.Batch-level activities.

c.Product-level activities.

d.Unit-level activities.

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5.Arranging for a shipment of a number of different products to a customer is an example of an activity at which of the following levels?

a.Customer-level activity.

b.Unit-level activity.

c.Batch-level activity.

d.Organization-sustaining activity.