Quiz #2
1. When the predetermined overhead rate is based on the level of activity at capacity, an item called the
Cost of Unused Capacity may appear to be treated as a period expense on income statements prepared
for internal management use.
a. True
2. Mickley Company’s plantwide predetermined overhead rate is $23.00 per direct labor-hour and its direct
labor wage rate is $10.00 per hour. The following information pertains to Job A-500:
1. When the predetermined overhead rate is based on the level of activity at capacity, an item called the
Cost of Unused Capacity may appear to be treated as a period expense on income statements prepared
for internal management use.
a. True
2. Mickley Company’s plantwide predetermined overhead rate is $23.00 per direct labor-hour and its direct
labor wage rate is $10.00 per hour. The following information pertains to Job A-500:
