Company Zee Produces a Widget That Requires $15 of Material

question 33

True/False

Company Zee produces a widget that requires $15 of material per unit along with ½ hour of labor, the average rate being $18/hour. The company's predetermined overhead rate includes $5 of variable cost and $6 of fixed cost per labor hour when the activity level is 10,000 labor hours. Direct costing would cost this widget at $29.50 per unit.

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Definitions:

Callable Bond

A type of bond that gives the issuer the right to redeem the bond at a predetermined price before its maturity date.

Yield To Call

The rate of return anticipated on a bond if it is held until the call date, before the bond's maturity date.

Par Value

The face value of a bond or stock, representing the amount the issuer will return to the holder at maturity.

Current Yield

The annual income (interest or dividends) divided by the current price of the security.