1.
Budgeted Fixed Manufacturing Overhead Rate:
The budgeted fixed manufacturing overhead rate is that rate at which the total budgeted fixed overhead costs are allocated. This is a rate which is determined so that the fixed overhead which is estimated can be allocated to the available units according to that rate.
The way in which the budgeted fixed cost per meal of $1.64 in 2014 is calculated.
2.
The way in which hospitals will be charged for each meal of T and the reaction of the hospital controllers to the price.
3.
The alternative cost-based price per meal that can be proposed and is more acceptable and the steps that T and S can take to make this price profitable in the long run.
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