Jimbob Co Has the Following Estimated Costs for the Next Year

question 61

Multiple Choice

Jimbob Co. has the following estimated costs for the next year: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$$ The company estimates that 20,000 labour hours will be worked and 1,000 machine hours incurred during the year. If overhead is applied on the basis of direct labour costs, the overhead rate will be:

• A)100%.
• B)400%.
• C)225%.
• D)200%.

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Definitions:

Prohibited By Law

Activities, actions or substances that are explicitly forbidden by legal statutes.

Disaffirm The Contract

The legal act of a party declaring a contract void and relinquishing all rights and obligations under that contract.

Intoxicated

The condition of being under the influence of alcohol or drugs to the extent that mental and motor skills are impaired.

Market Value

The amount of money a willing buyer would pay a willing seller for goods, services, or assets in a competitive marketplace.