Question: 2. (Appendix 5A) If used to set a predetermined overhead rate, which level of activity may encourage managers to increase selling prices as demand falls?

2. (Appendix 5A) If used to set a predetermined overhead rate, which level of activity may encourage managers to increase selling prices as demand falls?

a. Capacity (maximum) level of activity.

b. Actual level of activity.

c. Budgeted level of activity.

d. Normal level of activity.

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