A Task Is Expected to Take 20 Hours of Labor

question 62

Multiple Choice

A task is expected to take 20 hours of labor at $25 per hour. The required material cost is $500 and the organization charges 30% of direct labor for overhead. The total task cost is:

• A) $500
• B) $1,150
• C) $1,250
• D) $1,300
• E) $1,500

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Definitions:

Speculative Motive

The intent to hold cash or other assets for the purpose of benefiting from future market movements.

Precautionary Motive

The desire to hold cash or liquid assets to guard against unforeseen future needs and emergencies.

Transaction Motive

The need for cash to meet immediate and anticipated demands for payment, a key reason for holding cash in business.

Speculative Motive

The intention to hold cash or other assets in anticipation of future market fluctuations to gain financial advantages.