Forever Quilting Is a Company That Designs and Distributes Quilting

question 169

Multiple Choice

Forever Quilting is a company that designs and distributes quilting kits.The kits are priced at $120 each.The costs of the materials that go into each kit are $45.It costs $5 in labor to assemble a kit.The company has monthly expenses of $1,000 for rent and insurance,$200 for heat and electricity,$500 for advertising in quilting magazines,and $3,500 for the monthly salary of its owner.Forever Quilting's marginal revenue is

• A)$50.
• B)$70.
• C)$120.
• D)$3,500.
• E)$5,200.

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Definitions:

Estimated Machine Hours

Estimated machine hours are an approximation of the operating hours of machinery within a specific time period, used in costing and budgeting processes to allocate overhead expenses based on machine usage.

Factory Overhead Account

An accounting category that accumulates all the indirect costs associated with manufacturing, excluding direct materials and direct labor.

Credit Balance

A credit balance is the amount of money a financial account shows on the credit side, indicating funds received or owed to the account holder.

Jobs Completed

Refers to work or projects that have been finished within a specified accounting period.