Wizard Manufacturing Makes Small Consumer Electronics Products Like Mixers and Toasters

question 321

True/False

Wizard Manufacturing makes small consumer electronics products like mixers and toasters. The industry is relatively stable, having few new advances in product development. Wizard should use a line or line-and-staff organizational structure to ensure efficient operations.

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Definitions:

Predetermined Overhead Rate

An estimated overhead rate used to apply manufacturing overhead to products, calculated before the accounting period begins.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, used as a basis for allocating overhead costs.

Machine-Hours

A measure of the amount of time machines are operated during the production process, used for allocating costs or measuring productivity.

Markup

The additional sum included in the purchase price of products to account for overhead expenses and profit.