Use the Following Information to Answer the Following Question(s), Using

question 26

Multiple Choice

Use the following information to answer the following question(s) , using the SUMPRODUCT function.
Stone Age Surfboards is a small manufacturer of two types of popular high-tide surfboards, the Rockwell and the Limestone models. The manufacturing process consists of two departments: fabrication and finishing. The fabrication department has 15 skilled workers, each of whom works 5 hours per day. The finishing department has 5 workers, who also work a 5-hour shift. Each pair of Rockwell surfboards requires 3 labor hours in the fabrication department and 1.5 labor hours in finishing. The Limestone model requires 4.5 labor-hours in fabrication and 2 labor-hours in finishing. The company operates 6 days a week. It makes a per-unit profit of $60 on the Rockwell model and $75 on the Limestone model. Approximately 4.1 Rockwell models and 8.4 Limestone models are produced per day. $\begin{array}{|c|c|c|c|c|}\hline & \text { A } & \text { B } & \text { C } & \text { D } \\\hline 1 & \text { Stone Age Surfboards } & & & \\\hline 2 & & & & \\\hline 3 & \text { Data } && \\\hline 4 & & &{\text { Product }} & \\\hline 5 & \text { Department } & \text { Rockwell } & \text { Limestone } & \text { Limitation (hours) } \\\hline 6 & \text { Fabrication } & 3 & 4.5 & 75 \\\hline 7 & \text { Finishing } & 1.5 & 2 & 25 \\\hline 8 & & & & \\\hline 9 & \text { Profit/Unit } & \$ 60.00 & \$ 75.00 \\\hline 10 & & & \\\hline 11 & & & \\\hline 12 & \text { Model } & & \\\hline 13 & & \text { Rockwell } & \text { Limestone } \\\hline 14 & \text { Quantity Produced } & 4.1 & 8.4 & \text { Hours Used } \\\hline 15 & \text { Fabrication } & & & \\\hline 16 & \text { Finishing } & & & \\\hline 17 & & & & \\\hline 18 & & & & \text { Excess Limestone } \\\hline 19 & \text { Market Mixture } & & & \\\hline 20 & & & & \\\hline 21 & & & & \text { Total Profit } \\\hline 22 & \text { Profit Contribution } & & & \\\hline\end{array}$
-What is the total number of hours used for the finishing operation?

• A) 42.58
• B) 50.10
• C) 35.64
• D) 22.95

Understand the effects of buying and selling portions of investments on the investment account balance.

Understand and apply the equity method for accounting for investments.

Prepare journal entries related to equity method investments including initial recognition, recognition of investee's net income or loss, and dividends received.

Calculate and defer gross profit on inter-entity inventory sales and recognize it appropriately in subsequent periods.

---

Definitions:

Intrinsic Value

The inherent or true value of an asset, investment, or company, based on fundamental analysis, excluding market speculation.

Exercise Price

The predetermined price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock or other asset at a specified price within a specified time.

Risk-free Rate

Often considered as the return on government securities, it represents the interest an investor would expect from an absolutely risk-free investment over a specified period.