Use the Following Information for Questions
Lonely Guy Repair

question 121

Multiple Choice

Use the following information for questions
Lonely Guy Repair Service recently performed repair services for a customer that totaled $400. Somehow the bill was lost and the company accountant was trying to recreate the bill from memory. This is what was remembered: $$\begin{array} { l l } \text { Total bill } & \$ 600 \\\text { Labor profit margin } & \$ 10 \\\text { Materials profit margin } & 20 \% \\\text { Total labor charges } & \$ 390 \\\text { Cost of materials used } & \$ 120 \\\text { Total hourly cost } & \$ 22.50\end{array}$$
-How many hours were billed on the job?

• A) 19.5
• B) 18.5
• C) 17.3
• D) 12.0

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Definitions:

Segmented Income Statement

An income statement that separates costs and revenues into different segments, departments, or divisions of a business.

Contribution Approach

An income statement format that organizes costs by their behavior. Costs are separated into variable and fixed categories rather than being separated into product and period costs for external reporting purposes.

Manufacturing Overhead

All indirect costs related to manufacturing that cannot be directly traced to specific items produced, such as factory rent, utilities, and equipment depreciation.

Variable Costing

An accounting approach that only considers variable costs—costs that change with the level of output—in product costing and decision-making.