Penrod Company Wants to Manufacture and Sell a New Electric

question 40

Multiple Choice

Penrod Company wants to manufacture and sell a new electric shaver.To compete effectively,the shaver would have to be priced at no more than $40 per unit.The following additional information is available: The target cost per shaver would be:

• A)$25
• B)$45
• C)$35
• D)$40

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Definitions:

Direct Labor Hours

The number of labor hours spent by workers who are directly involved in the production of goods or services.

Materials Requisitions

Documents used to request the transfer of materials from inventory for production purposes or other internal use.

Job Cost Sheets

Documents that track and record all the costs associated with a specific job or project.

Cost Allocation

Cost Allocation is the process of identifying, aggregating, and assigning costs to cost objects such as products, departments, or projects to accurately represent where expenses are incurred.