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	41,080
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?

1. $6.94.
2. $8.56.
3. $3.50.
4. $7.63.

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

1. It primarily measures and records business transactions
2. The reports are generally delayed and historical
3. There are no regulations governing the reports
4. The reports are audited so they can be used in confidence by potential investors

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