Figure 4-17 Moss Corporation Has the Following Activities: Creating Bills

question 32

Multiple Choice

Figure 4-17 Moss Corporation has the following activities: creating bills of materials (BOM) , studying manufacturing capabilities, improving manufacturing processes, training employees, and designing tooling.The general ledger accounts reveal the following expenditures for manufacturing engineering:
The equipment is used for two activities: improving processes and designing tooling.Thirty-five percent of the equipment's time is used for improving processes and 65 percent is used for designing tools.The salaries are for two engineers.One is paid $50,000, while the other earns $25,000.The $50,000 engineer spends 40 percent of his time training employees in new processes and 60 percent of his time on improving processes.The remaining engineer spends equal time on all activities.Supplies are consumed in the following proportions:

-Refer to Figure 4-17.What is the cost assigned to the improving processes activity?

• A) $250,000
• B) $25,000
• C) $43,750
• D) $51,000

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Definitions:

Senior Debt

Senior debt is a loan or bond that takes priority over other unsecured or junior debt owed by the issuer.

Convertible

A type of financial security, such as a bond or preferred stock, that can be converted into a specified amount of another type, typically common stock, at the holder's option.

Bond Yields

The amount of return an investor realizes on a bond, usually expressed as a percentage of the bond's value.

Present Value

The present worth of a future sum of money or series of cash flows, when discounted at a specific rate of interest.