43.

Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activitiesproduction setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:

Activity	Cost	Activity Base
Production setup	$250,000	Number of setups
Material handling	150,000	Number of parts
General overhead	80,000	Number of direct labor hours

Each product's total activity in each of the three areas are as follows:

	Product A	Product B
Number of setups	100	300
Number of parts	40,000	20,000
Number of direct labor hours	8,000	12,000

What is the activity rate for general overhead?

a.$4.00 per direct labor hour

b.$6.67 per direct labor hour

c.$60.00 per direct labor hour

d.$10.00 per direct labor hour

46.

Magpie Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% rate of return on invested assets of $700,000.

Fixed factory overhead cost	$38,700
Fixed selling and administrative costs	7,500
Variable direct materials cost per unit	4.60
Variable direct labor cost per unit	1.88
Variable factory overhead cost per unit	1.13
Variable selling and administrative cost per unit	4.50

The markup percentage on total cost for the company's product is

a.24.0%

b.21.0%

c.15.8%

d.22.6%