B-21.07 Problem

B-21.07 Problem - overhead is applied to production based...

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B-21.07 The chief financial officer for Cast in Stone concrete products had previously established a line of credit with a local bank that enables Cast in Stone to borrow 80% of the company's inventory balance. The company currently has 1,000 units in stock, and is performing "on budget." The budget anticipated that direct labor cost would be $15 per hour, and factory
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Unformatted text preview: overhead is applied to production based on $7.50 per direct labor hour. Each unit requires 2.5 labor hours and 800 pounds of direct material. The direct material costs $0.10 per pound. Determine the amount of credit available under the borrowing agreement....
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