Sherman,Inc

question 9

Multiple Choice

Sherman,Inc.manufactures chainsaws that sell for $58.Each chainsaw uses $10 in direct materials and $3 in direct labor per unit.Sherman has two activities: Machining,which is applied at the rate of $2 per machine hour,and Finishing,which is applied at the rate of $20 per batch.This month,Sherman made 200 chainsaws,using 1,000 machine hours in 40 batches.What is the gross profit for one chainsaw?

• A)$13
• B)$27
• C)$31
• D)$47

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Definitions:

Promissory Note

A financial instrument containing a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Promissory Note

A financial instrument involving a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.

Simple Interest

Interest calculated only on the original principal, not on the accumulated interest from previous periods.

Maturity Value

The amount payable to an investor at the end of a debt instrument's life, including both the principal and the interest.