Three Accountants Can Prepare 5 Tax Returns a Day and Four

question 79

Multiple Choice

Three accountants can prepare 5 tax returns a day and four accountants can prepare 7 tax returns a day.If the marginal revenue product of hiring the fourth accountant is $300,then in a perfectly competitive product market the price of each tax return is

• A)$250
• B)$100
• C)$300
• D)$200
• E)$150

Calculate and understand selling prices based on manufacturing costs and markup percentages.

Identify how direct labor hours and machine hours are used as the allocation base for applying overhead.

Understand the financial implications of job-order costing decisions on pricing, costing, and overhead allocation.

Understand job-order costing systems and calculate predetermined overhead rates.

---

Definitions:

Direct Labour

The wages paid to workers directly involved in the production of goods or services, considered a variable cost.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services.

Net Operating Income

The total profit of a business after operating expenses are subtracted from gross profit but before deducting interest and taxes.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.