(Appendix 2B) Dunnings Woodworking Corporation Produces Fine Cabinets

Multiple Choice

(Appendix 2B) Dunnings Woodworking Corporation produces fine cabinets. The company uses a job-order costing system in which its predetermined overhead rate is based on capacity. The capacity of the factory is determined by the capacity of its constraint, which is an automated router. Additional information is provided below for the most recent month:

-If the company bases its predetermined overhead rate on capacity,what would be the cost of unused capacity reported on the income statement prepared for internal management purposes?

A) $2,970
B) $2,541
C) $1,716
D) $4,257