The management of Kennedy Corporation would like to imvestigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new Estimated Capacity Actual $1,855,000 $1,855,000 $1,835,000 system would work, using machine-hours as the allocation base. 50,000 53,000 49,000 MHs Machine hours MOH 10 If the Corporation bases its predetermined overhead rate on capacity, then as shown on the income statement prepared for internal management purposes, the cost of unused capacity would be closest to: A. S 148,400 S 105,000 S 140,000 s 111,300 None of the above .oa> E 10 11 Lincoln Co. has fixed costs of $200,000 and breakeven sales of $1,600,000. What is the projected profit at $2,400,000 S 100,000 S 300,000 s 800,000 S 1,400,000 E None of the above Page 7 of 14