9. Under normal costing, which of the following statements regarding factory overhead is true?

a.Different overhead rates are used for different quantities of predicted activity.

b.The immaterial balance in Factory Overhead at the end of the accounting period is allocated to the cost of goods sold and inventory accounts.

c.The balance in Factory Overhead at the end of the accounting period is kept open.

d.The balance in Factory Overhead at the end of the accounting period is closed.

10. Bruce's Manufacturing, a company based in the United States, has two additional divisions abroad: Division E, located in Europe, and Division C, located in Canada. The three divisions sell to each other on a regular basis. Division E purchases a component that cannot be purchased externally (i.e., it has no outside market) from Division C. The additional costs of freight and insurance while in transit are $3 and $2, respectively, for each component. Division E, in turn, sells the component to its customers for $44.80 and normally receives a 40% markup on cost of goods sold. What is the transfer price using the resale price method?

a.$44.80

b.$32.00

c.$26.88

d.$62.72

11. Worldwide, Inc., is a multinational company with divisions around the world. Division A in the United States purchases a part from Division G in China. There is no outside market for the part because it is used to manufacture another product. The manufacturing cost for the part is $5.00. Transportation is $1.00, and commissions are $0.50 but do not need to be paid. <

a.$6.00

b.$5.50

c.$5.00

d.$6.50