Resources Used Versus Resources Supplied

question 85

Essay

Resources used versus resources supplied.Here is information about resources for Health Unlimited,which produces publications for various health food companies:

Required:
a.Compute unused capacity for these items.
b.Management wants no more than 20 percent of total costs to be incurred for unused capacity.How well is Health Unlimited doing?
(Health Unlimited;Resources used versus resources supplied. )

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Definitions:

Direct Materials

Raw materials directly used in the production of goods, easily traceable to the product being manufactured.

Operating Income

The profit realized from a business's core operations after deducting operating expenses such as wages and cost of goods sold, but before taxes and interest.

Direct Labor

The cost of wages for those workers directly involved in the production of goods or services, not including support staff.

Overhead

General business expenses that are not directly attributable to a specific business activity, product, or service but are necessary for the business to operate.