Answer the Following Question(s) Using the Information Below

question 10

Multiple Choice

Answer the following question(s) using the information below.
Sunny Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect cost allocation rate of $15 per direct labour hour. The following data are obtained from the accounting records for June 2012:

-The amount of manufacturing overhead allocated to all jobs during June 2012 totals

• A) $77,000.
• B) $105,000.
• C) $110,000.
• D) $200,000.
• E) $557,000.

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Definitions:

ROE

Return On Equity, a profitability ratio that measures the ability of a firm to generate profits from its shareholders' investments in the company.

Required Return

The minimum expected return an investor demands to compensate for the risk of an investment.

Plowback Ratio

The proportion of earnings retained by a company rather than distributed to its shareholders as dividends.

P/E Multiple

Also known as Price-to-Earnings Ratio, it compares a company's share price to its per-share earnings, used to evaluate if a stock is over or undervalued.