Last Year an Operation Had Sales of $800,000 and Generated

question 11

Multiple Choice

Last year an operation had sales of $800,000 and generated a net income of $88,000. What was the operation's profit margin last year?

• A) 8%
• B) 11%
• C) 13%
• D) 15%

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Definitions:

Direct Labor-Hours

The overall hours dedicated by workers who are directly contributing to the production line.

Variable Overhead

Costs that vary with the level of production output, such as utilities for manufacturing equipment, which are not fixed.

Standard Cost

An estimated or pre-determined cost of manufacturing a product or performing a service, used for budgeting and performance evaluation.

Variable Manufacturing Overhead

Indirect production costs that fluctuate with the level of production output, such as utilities for the manufacturing plant.