Use the Following to Answer Questions

question 252

Multiple Choice

Use the following to answer questions:
Scenario: First National Bank
First National Bank has $80 million in checkable deposits, $15 million in deposits with the Federal Reserve, $5 million cash in the bank vault, and $5 million in government bonds.
-(Scenario: First National Bank) Look at the scenario First National Bank. If the minimum reserve ratio is 20%, how much is the bank required to keep in reserves?

• A)$20 million
• B)$16 million
• C)$25 million
• D)$10 million

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Definitions:

Machine-Hours

A measure of the amount of time a machine is operated in the production process, often used in costing and budgeting.

Predetermined Overhead Rate

A rate calculated before an accounting period begins, used to allocate manufacturing overhead to individual jobs or units based on a consistent measure, such as direct labor hours.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, often used as a basis for allocating costs to products.

Machine-Hours

A measure of production time, reflecting the total hours that machinery is operational during a specific period.