Fast Feet,Inc

question 60

Essay

Fast Feet,Inc.(FFI),is a manufacturer of running shoes.FFI gives merchandise on credit to Rick's Running,a small retailer of athletic shoes for distance runners.FFI requires Rick's to sign an agreement that describes the merchandise as collateral and specifies that Rick's will pay FFI weekly based on the sales of the shoes.FFI files a statement of notice with the appropriate government agency.Based on these facts,what kind of creditor is FFI,and why?

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Definitions:

Machine-Hours

A unit of measure representing the operation of machinery over time, typically used for allocating manufacturing overhead costs.

Predetermined Overhead Rate

A rate calculated at the beginning of a period for allocating estimated overhead costs to cost objects based on a chosen activity base.

Machine-Hours

This refers to the total number of hours that machinery is in operation, used as a basis for allocating manufacturing overhead to products.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, calculated before the period begins based on estimated overhead and activity levels.