What will be the new overhead rate for Acme Plumbing if its sales increase by $55,000 and overhead by $14,000?

To determine the new overhead rate for Acme Plumbing, it is essential to first understand what the overhead rate represents. The overhead rate is calculated by dividing the total overhead costs by the total sales. This ratio helps businesses understand how much they are spending on overhead relative to their sales volume.

In this scenario, Acme Plumbing's sales increase by $55,000, and its overhead also increases, but by only $14,000. To find the new overhead rate, the following formula can be applied:

New Overhead Rate = (New Overhead Costs / New Sales) * 100

First, we should denote the existing overhead and sales figures as "Old Overhead" and "Old Sales." After the increase, the new figures would be:

New Sales = Old Sales + $55,000

New Overhead = Old Overhead + $14,000

Plugging in these modifications into the overhead rate formula, we can express it as follows:

New Overhead Rate = ((Old Overhead + $14,000) / (Old Sales + $55,000)) * 100

Without the actual initial values of old overhead and old sales, we can still analyze the changes. The increase in overhead ($14,000)