Use the Following Information for Questions
Carlos Consulting Inc

question 110

Multiple Choice

Use the following information for questions
Carlos Consulting Inc. provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant. $$\begin{array} { c l } \text { Consultants' wages } & \$ 90,000 \\\text { Fringe benefits } & \$ 22,500 \\\text { Related overhead } & \$ 17,500 \\\text { Supply clerk's wages } & \$ 18,000 \\\text { Fringe benefits } & \$ 4,000 \\\text { Related overhead } & \$ 20,000 \\\text { Profit margin per hour } & \$ 20 \\\text { Profit margin on materials } & 15 \% \\\text { Total estimated consulting hours } & 5,000 \\\text { Total estimated material costs } & \$ 168,000\end{array}$$
-The material loading charge is

• A) 15%.
• B) 25%.
• C) 40%.
• D) 55%.

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Definitions:

Average Collection Period

The average number of days it takes for a company to receive payments owed by its customers for goods or services sold on credit.

Credit Sales

Credit sales are transactions where the buyer is allowed to pay for goods or services at a later date, extending credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered on credit.

Compensating Balance

A minimum balance that must be maintained in a bank account, often required by banks in return for loans or as part of a service agreement.