Required information
[The following information applies to the questionsdisplayed below.]
The controller for Tender Bird Poultry, Inc. estimates that thecompany’s fixed overhead is $100,000 per year. She also hasdetermined that the variable overhead is approximately $0.15 perchicken raised and sold. Since the firm has a single product,overhead is applied on the basis of output units, chickens raisedand sold.
Required:
1. Calculate the predetermined overhead rateunder each of the following output predictions: (Round youranswers to 2 decimal places.)
| Volumes | Overhead Rate |
| 200,000 | | per chicken |
| 300,000 | | per chicken |
| 400,000 | | per chicken |
2. Does the predetermined overhead rate change in proportion tothe change in predicted production?
