Before the Application of Overhead Costs Chrome & Steel Ltd

question 35

Multiple Choice

Before the application of overhead costs Chrome & Steel Ltd has the following costs traced to production:
Direct materials Direct labour
Charged to production $50 000 $40 000
Assuming that overhead is applied at the rate of 80% of direct labour cost what is the amount of inventory finished for the period (assume no work in process) ?

• A) $50 000
• B) $90 000
• C) $122 000
• D) $130 000

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Definitions:

Business Plan

A document describing a business that is used to test the feasibility of a business idea, to raise capital, and to serve as a road map for future operations.

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at promoting fair competition and preventing unfair business practices such as price discrimination, anti-competitive mergers, and exclusive dealing contracts.

Federal Trade Commission Act

A U.S. law established in 1914 to prevent unfair competition, fraudulent marketing, and monopolies, creating the Federal Trade Commission (FTC) to enforce these regulations.

Tax Incentives

Financial benefits provided by the government to encourage certain behaviors or investments, such as tax credits or deductions.