The Frame Shoppe Reported That Fixed Costs Remain Constant at $450,000

question 63

Multiple Choice

The Frame Shoppe reported that fixed costs remain constant at $450,000 per month.During high-output months variable costs are $315,000,and during the low-output months variable costs are $60,000.What are the high and low indirect-cost rates if budgeted professional labor-hours are 15,000 for high-output months and 1,857 for low-output months?
Required:
Compute the budgeted indirect cost rate for the high-output month and the low-output month.

• A)$51 per hour ;$201 per hour
• B)$60 per hour;$206 per hour
• C)$80 per hour;$210 per hour
• D)$85 per hour;$215 per hour
• E)$90 per hour;$220 per hour

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Definitions:

Indirect Quote

A foreign exchange rate quoted as the foreign currency per unit of domestic currency.

Mexican Pesos

The currency of Mexico, abbreviated as MXN, used for all financial transactions within the country.

Spot Exchange Rate

The current price at which one currency can be exchanged for another currency in the foreign exchange market.

Forward Exchange Rate

The rate at which two currencies will be exchanged at a specified future date, agreed upon today.