Answer the Following Question(s)using the Information Below

question 65

Multiple Choice

Answer the following question(s) using the information below:
The Fancy Flier Airplane Corporation has a central materials laboratory.The laboratory has only two users, the Large Plane Department and the Small Plane Department.The following data apply to the coming budget year:
Budgeted amounts are used to calculate the allocation rates.Actual usage for the year by the Large Plane Department was 6,000 technician hours and by the Small Plane Department was 6,500 technician hours.
-If a dual-rate cost allocation method is used, what amount of materials laboratory costs will be budgeted for the Small Plane Department?

• A)$1,057,500
• B)$763,750
• C)$705,000
• D)$822,500
• E)$897,500

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Definitions:

Return on Total Assets

A financial ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets, indicating how efficiently a company uses its assets to generate earnings.

Net Income Before Interest and Taxes

Earnings of a company before interest and tax expenses are deducted; also known as operating profit.

Accounts Receivable Turnover

A financial metric that measures how many times a company collects its average accounts receivable in a period, indicating the efficiency of extending credit and collecting debts.

Average Accounts Receivable

The average amount of money owed to a company by its customers for goods or services provided on credit over a specified period.