At the Beginning of the Current Year CR Company Estimated

question 5

Multiple Choice

At the beginning of the current year CR Company estimated the following costs:
CR Company estimated 20,000 labour hours to be worked during the year.Actual labour hours worked were 22,000 hours.If overhead is applied on the basis of direct labour hours,what will be the overhead applied for the year?

• A) $55,000.
• B) $49,500.
• C) $103,400.
• D) $75,900.Applied = 22,000 hrs.@ $2.25/hr = $49,500

Grasp the impact of debt financing on a firm's value and the cost of capital when taxes are considered.

Recognize the difference between business risk and financial risk, and their determinants.

Understand how the optimal capital structure minimizes the weighted average cost of capital (WACC) and maximizes firm value.

Analyze the implications of the static theory of capital structure on financial decision-making.

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Definitions:

Labor-Intensive

Describing a process or industry that requires a large amount of labor to produce its goods or services.

Marginal Product

The additional output generated by employing one more unit of a specific input, while holding other inputs constant.

Labor

The effort of humans, including both physical and mental labor, utilized in creating goods and providing services.

Marginal Product

The increase in output resulting from a one-unit increase in the amount of a single input while holding other inputs constant.