1. Nelson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $247,000 and 15,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $263,000 and 15,500 total direct labor-hours during the period. The predetermined overhead rate is closest to:

a. $16.97

b. $15.94

c. $17.53

d. $16.47

2. If Miller Corp. increases its sales volume and nothing else changes, then the:

1. contribution margin ratio will increase.
2. margin of safety will increase.
3. break-even point will decrease.
4. net operating income will decrease.