Doug,Kate,and Gabe Own Refiner Group,Inc

question 80

Multiple Choice

Doug,Kate,and Gabe own Refiner Group,Inc. ,an electing S corporation.The shareholder's ownership percentages and fiscal year ends follow:
Which of the following statements is (are) correct?

I.Refiner Group,Inc.must use a calendar year.
II.Refiner Group,Inc.may elect to use a fiscal year ending January 31.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Overhead Rate

A measure used to allocate overhead costs to products or services, often calculated by dividing total overheads by a base measure such as labor hours or machine hours.

Estimated Labor-Hours

The projected number of labor hours required to complete a batch of goods or provide a service.

Predetermined Overhead Rate

A rate used to allocate estimated overhead costs to products or job orders, based on a planned level of activity or driver.

Unused Capacity

Resources available for use that are not being employed in production, often representing inefficiency.