Ceiling Fans by Ike's Overhead Budget for 2009 Was as Follows

question 108

Multiple Choice

Ceiling Fans by Ike's overhead budget for 2009 was as follows: 600,000 units were produced in 2009.
Direct labor cost is $18,000,000.
For both 2009 and 2010, each unit required 3 direct labor hours at $10 per hour.
In 2010, property taxes, insurance, and depreciation are expected to stay at 2009 levels.
Utilities costs vary proportionally with units produced.
Factory supervision increases by increments of $30,000 for every 200,000 increase in direct labor hours.
The 2010 expected production is 1,200,000 units.
What will be the value for factory supervision in the 2010 overhead budget?

• A) $570,000
• B) $270,000
• C) $450,000
• D) $400,000

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Definitions:

Monetary Policy

The process by which a country's central bank or monetary authority controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.

Reserves

Vault cash and deposits of banks held by Federal Reserve district banks.

Deposits

Funds placed into an account at a financial institution for safekeeping and often to earn interest.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulating banks, maintaining financial stability, and providing banking services to governmental institutions.