The Following Information Has Been Gathered for the GHI Manufacturing

question 62

Multiple Choice

The following information has been gathered for the GHI Manufacturing Company for its fiscal year ending December 31: What is the predetermined manufacturing overhead rate,assuming direct labor cost is used as the activity base?

• A)48.4%.
• B)47.2%.
• C)49.0%.
• D)47.8%.

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Definitions:

Profit Rate

The ratio of net profits to total revenues of a business, indicating its efficiency at generating profit.

Inventory

The total amount of goods and raw materials held by a business to facilitate production or meet customer demand.

Invest

The action of designating assets, typically capital, in hopes of generating financial gains.

Profit Rate

The ratio of profits generated to the amount of capital or resources invested, indicating the efficiency of an investment or business operation.