At a New Watch Assembly Plant, a Job Is Divided

question 67

Multiple Choice

At a new watch assembly plant, a job is divided into three work elements. The element times for the first four cycles are recorded by the continuous method and are presented below along with a performance rating factor (RF) for each element.
The standard time for this job, assuming that the allowance is 18 percent, is:

• A) fewer than or equal to 1.9 minutes.
• B) greater than 1.9 minutes but fewer than or equal to 2.0 minutes.
• C) greater than 2.0 minutes but fewer than or equal to 2.1 minutes.
• D) greater than 2.1 minutes.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Fair Value Enterprise Method

An accounting approach for valuing a subsidiary company at its current market value rather than its book value or cost in the financial statements of a parent company.

Identifiable Net Assets

Assets that can be separately identified and measured apart from the business entity, often relevant in the valuation of companies for acquisition or reporting purposes.

Non-Controlling Interest

The portion of equity in a subsidiary not owned directly or indirectly by the parent company.