Production Data for the Number of Hours Required Per Unit

question 52

Multiple Choice

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below.Suppose the plant decides to make the maximum number of iPhone components possible and reach the rest of its capacity by making Droid phones.How much profit will it make? Monthly Product

• A)$3750
• B)$1500
• C)$5250
• D)$4000

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Definitions:

Direct Labor-Hours

The aggregate of hours spent by staff members who are directly engaged in producing merchandise or rendering a service.

Job-Order Costing

A cost accounting system that assigns costs to specific production batches or jobs, making it suitable for customized orders.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders, based on a particular activity base.

Machine-Hours

A measure of production time used in cost accounting, representing the number of hours that machinery is in operation during a given period.