Which of the Following Two Methods Are Typically Used for Initial

question 121

Multiple Choice

Which of the following two methods are typically used for initial screening of investments,rather than for detailed,in-depth analysis?

• A) payback and accounting rate of return
• B) net present value and payback
• C) internal rate of return and net present value
• D) accounting rate of return and net present value

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Definitions:

Direct Labor-Hours

The cumulative hours employees spend directly participating in the manufacturing process.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies directly with production volume, such as utilities or raw materials.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated before the period begins based on estimated overhead costs and an allocation base.

Direct Labor-Hours

The total hours worked by employees directly involved in the production of goods or services.