The Following Data Came from the Financial Statements of Petrini

question 47

Multiple Choice

The following data came from the financial statements of Petrini Company: Compute the times interest earned ratio (rounded to two decimal places) for Petrini Company.

• A) 130 times
• B) 129 times
• C) 122 times
• D) 139 times

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Definitions:

Manufacturing Overhead Applied

The allocation of estimated manufacturing overhead costs to individual units of production based on a predetermined rate.

Machine-Hours

A measure of the amount of time machines are operated, used as a basis for allocating manufacturing overhead costs in some costing systems.

Predetermined Overhead Rate

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

Direct Labor-Hour

A measure of the labor time directly involved in the production of goods, usually quantified in hours.