Business, 15.02.2022 06:30, rileybaby34
The controller for Tender Bird Poultry, Inc., estimates that the company’s fixed overhead is $100,000 per year. She also has determined that the variable overhead is approximately $0.10 per chicken raised and sold. Since the firm has a single product, overhead is applied on the basis of output units, chickens raised and sold.
Required:
a. Calculate the predetermined overhead rate under each of the following output predictions:
1. 200,000 chickens.
2. 300,000 chickens
3. 400.000 chickens.
b. Does the predetermined overhead rate change in proportion to the change in predicted production? Why?.
Answers: 3
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