Frazier Fudge Is Projecting a Growth in Sales Next Year

question 148

Multiple Choice

Frazier Fudge is projecting a growth in sales next year of 10% along with an external financing requirement of $200. They had the following results this year: Sales of $18,000; Assets of $6,460; Current liabilities of $500; Return on Sales of 10%. Calculate their projected dividend payout ratio. (Assume that assets, current liabilities, and income grow with the level of sales.)

• A) 80%
• B) 60%
• C) 40%
• D) 20%

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Definitions:

Labor Rate Variance

The difference between the actual cost of direct labor and the estimated cost, indicating how well labor costs were controlled.

Direct Labor-hours

The complete tally of hours that workers, directly involved in making products or providing services, spend working.

Actual Direct Labor Cost

The total expense of labor directly involved in the production of goods or services, as it actually occurred.

Labor Rate Variance

Labor rate variance measures the difference between the actual labor costs incurred and the expected (or standard) labor costs, indicating discrepancies in wage rates or labor efficiency.