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For 2014, Bakers Manufacturing uses machinehours as the only overhead costallocation base. The direct cost rate is $4 per unit. The selling price of the
For 2014, Bakers Manufacturing uses machinehours as the only overhead costallocation base. The direct cost rate is $4 per unit. The selling price of the product is $18. The estimated manufacturing overhead costs are $120,000 and estimated 20,000 machine hours. The actual manufacturing overhead costs are $180,000 and actual machine hours are 30,000. What is the profit margin earned if each unit requires two machine-hours?
A. 11.11%
B. 75%
C. 37.5%
D. 50%
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