Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

The amount of direct-labor hours that should be used to produce one unit of finished goods is the:

predetermined overhead rate

direct-labor efficiency variance

actual direct-labor hours per unit

standard direct-labor hours per unit

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Verified step by step guidance

Understand the concept of 'standard direct-labor hours per unit': This refers to the amount of direct-labor hours that are expected or budgeted to produce one unit of finished goods under normal operating conditions.

Differentiate between the terms provided in the problem: The 'predetermined overhead rate' is used to allocate overhead costs based on a cost driver, such as direct-labor hours or machine hours. The 'direct-labor efficiency variance' measures the difference between the actual labor hours used and the standard labor hours allowed for the actual production. The 'actual direct-labor hours per unit' refers to the labor hours actually used to produce one unit, which may differ from the standard hours.

Recognize that the 'standard direct-labor hours per unit' is a benchmark or expected value set during the budgeting or planning process. It is used for cost control and performance evaluation purposes.

Relate the concept to production planning: The standard direct-labor hours per unit are determined based on historical data, engineering studies, or industry standards to ensure efficient production and cost management.

Conclude that the correct answer is 'standard direct-labor hours per unit,' as it represents the planned or expected labor hours required to produce one unit of finished goods under normal conditions.