Tom and Jerry Have Two Tasks to Do All Day

question 92

Multiple Choice

Tom and Jerry have two tasks to do all day: make dishes and build fences.If Tom spends all day making dishes,he will have make 16 dishes.If he instead devotes his day to building fences,Tom will build 4 fences.If Jerry spends his day making dishes,he will make 14 dishes; if he spends the day building fences,he will build 7 fences.If Tom divides his time evenly between activities and acts efficiently,he will produce:

• A) 16 dishes and 4 fences.
• B) 12 dishes and 3 fences.
• C) 8 dishes and 2 fences.
• D) 4 dishes and 3 fences.

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Definitions:

Markup Percentage

The proportion added onto the purchase price of items to cover the costs of overhead and ensure a profit.

Total Cost

The aggregate expense incurred in the production of goods or services, including fixed and variable costs.

Activity-Based Costing

Activity-Based Costing is an accounting method that assigns costs to products and services based on the activities required to produce or deliver them, aiming to more accurately reflect the true costs.

Overhead Allocated

Overhead Allocated refers to the process of distributing indirect costs (overheads) to specific cost objects, such as products or departments, based on a predetermined allocation method.