R-Cubed Manufactures Custom Playground Equipment from Recycled Plastics for City

question 13

Multiple Choice

R-Cubed manufactures custom playground equipment from recycled plastics for city school districts. The school districts are required to use a certain percentage of recycled materials to comply to its state grants. As a result, R-Cubed tracks both virgin (non-recycled) and recycled materials used to manufacture its playground equipment. R-Cubed uses a predetermined manufacturing overhead rate of $7.00 per direct labor hour.
Here is a summary of the materials and labor used on a recent job for Stow City Schools:
Calculate the percentage of recycled-content used in the Stow City Schools job (using pounds) .

• A)65%
• B)35%
• C)186%
• D)54%

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Definitions:

Production Capacity

The maximum output that a company can produce in a given period under normal conditions.

Variable Product Cost

Variable product cost includes costs that vary directly with the production volume, such as raw materials and direct labor.

Markup Percentage

The proportion added onto the purchase price of products to encompass operational costs and earnings.