(Consider This) In the middle ages, the French government auctioned off monopoly rights to the sale of salt. Economic theory predicts that the highest bids would Multiple Choice leave substantial economic profits for the winning bidders. equal the economic profits the winning bidder would expect to earn by owning the monopoly rights to sell salt. ensure that prices remained low, making salt available to the masses. equal the winner bidder's explicit costs of selling the salt.

Speedy auto repairs uses a job-order costing system. the company’s direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics’ hourly wages. speedy’s overhead costs include various items, such as the shop manager’s salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. the company applies all of its overhead costs to jobs based on direct labor-hours. at the beginning of the year, it made the following estimates: direct labor-hours required to support estimated output 20,000 fixed overhead cost $ 350,000 variable overhead cost per direct labor-hour $ 1.00 required: 1. compute the predetermined overhead rate. 2. during the year, mr. wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. the following information was available with respect to his job: direct materials $ 590 direct labor cost $ 109 direct labor-hours used 6