Question

The Work in Process Inventory account of a manufacturing company has a $7,305 debit balance. The...

The Work in Process Inventory account of a manufacturing company has a $7,305 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows direct material cost of $2,700 and direct labor cost of $1,500. Therefore, the company's predetermined overhead rate is:

Multiple Choice

  • 48% of direct labor cost.

  • 180% of direct labor cost.

  • 115% of direct labor cost.

  • 56% of direct labor cost.

  • 207% of direct labor cost.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Correct Option E i.e. 207% of direct labor cost.
Working Note:
Step 1: Calculation of Manufacturing Overhead
Total amount debited to WIP Inventory account          7,305
Less: Direct Material       (2,700)
Less: Direct labour cost       (1,500)
Manufacturing overhead          3,105
Step 2: Predetermined Overhead rate = Manufacturing overhead / direct labour cost*100
       =3105/1500*100
207%
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Work in Process Inventory account of a manufacturing company has a $3,750 debit balance. The...
The Work in Process Inventory account of a manufacturing company has a $3,750 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows direct material cost of $1,730 and direct labor cost of $790. Therefore, the amount of applied overhead is: $790. $1,230. $2,520. $2,020. $2,960. 2. Using the following accounts and a predetermined overhead rate of 150% of direct labor cost, compute the amount of applied overhead. Work...
1.The balance in the Work in Process account equals: the balance in the Finished Goods inventory...
1.The balance in the Work in Process account equals: the balance in the Finished Goods inventory account. the balances on the job cost sheets of uncompleted jobs. the balance in the Manufacturing Overhead account. the balance in the Cost of Goods Sold account. 2. The following data have been recorded for recently completed Job 674 on its job cost sheet. Direct materials cost was $2,039. A total of 32 direct labor-hours and 175 machine-hours were worked on the job. The...
Stock Co. uses a job costing system. The following debits (credits) appeared in Stock's work-in-process account...
Stock Co. uses a job costing system. The following debits (credits) appeared in Stock's work-in-process account for the month of April: April Description Amount 1 Balance $ 4,000 30 Direct materials 24,000 30 Direct labor 16,000 30 Factory overhead 12,800 30 To finished goods (48,000 ) Stock applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 5, the only job still in process on April 30 has been charged with direct labor of...
Billy Baroo Company uses a job order cost system. The following information was found in the...
Billy Baroo Company uses a job order cost system. The following information was found in the Work-in-Process account for the month of July. Date Description Amount [DR. or (CR.)] July 1 Balance $12,000 July 31 Direct labor 38,000 July 31 Direct materials 52,000 July 31 Factory overhead 30,400 July 31 Transfer to finished goods (80,000 ) Billy Baroo applies overhead to production at a predetermined rate of 80% based on the direct labor cost. Job #23, the only job still...
Turco Products uses a job order cost system. The following debits (credits) appeared in Work-in-Process Inventory...
Turco Products uses a job order cost system. The following debits (credits) appeared in Work-in-Process Inventory for September: Description Amount September 1 Balance $ 27,400 For the month Direct materials 162,800 For the month Direct labor 101,700 For the month Factory overhead 82,377 For the month To finished goods ( 318,400 ) Turco applies overhead to production at a predetermined rate of 81 percent based on direct labor cost. Job 9-27, the only job still in process at the end...
A company which uses a job-costing system, had two jobs in process at the start of...
A company which uses a job-costing system, had two jobs in process at the start of February 2018: Job no. J6 with a cost of $110,000 and job no. F1 with a cost of $22,000. The following information is available: The company applies manufacturing overhead on the basis of machine hours. Budgeted overhead and machine activity for the year were anticipated to be $3,366,000 and 102,000 hours, respectively. The company worked on four jobs during February. Direct materials used, direct...
Alpha Company applies overhead costs to jobs on the basis of direct labor costs, Job A,...
Alpha Company applies overhead costs to jobs on the basis of direct labor costs, Job A, which was started and completed during the current period, shows charges of $10,000 for direct materials, $16,000 for direct labor, and $12,000 for overhead on its job cost sheet. Job B, which was still in process at year end, shows charges of $5,000 for direct materials and $8,000 for direct labor. Required: 1. (5 pts.) Should any overhead cost be applied to Job B...
The following data have been recorded for recently completed Job 674 on its job cost sheet....
The following data have been recorded for recently completed Job 674 on its job cost sheet. Direct materials cost was $2,102. A total of 41 direct labor-hours and 197 machine-hours were worked on the job. The direct labor wage rate is $23 per labor-hour. The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $25 per machine-hour. The total cost for the job on its job cost sheet would be: Multiple Choice $4,926 $10,115 $7,970...
A job-order costing system that relies on normal costing will: Multiple Choice Assign actual direct materials...
A job-order costing system that relies on normal costing will: Multiple Choice Assign actual direct materials and direct labor costs to jobs. Apply overhead cost to jobs by multiplying an actual overhead rate by the estimated amount of the allocation base incurred by the jobs. Apply overhead cost to jobs by multiplying an actual overhead rate by the actual amount of the allocation base incurred by the jobs. Apply overhead cost to jobs by multiplying a predetermined overhead rate by...
The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of...
The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions's job cost sheets show the following total costs accumulated on three furniture jobs. Job 602 Job 603 Job 604 Direct materials $ 1,500 $ 3,300 $ 2,700 Direct labor 800 1,420 2,100 Overhead 400 710 1,050 Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $600; direct labor,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT