This preview shows page 1. Sign up to view the full content.
Unformatted text preview: The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of: C. 125% $2,400 - ($400 + $200) - ($300 + $500) = $1,000 $1,000 / ($300 + $500) = 125% If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the Manufacturing Overhead account at the end of any period means that: B. more overhead cost has been charged to jobs than has been incurred during the period. Source(s): 35 years of accounting experience...
View Full Document
This note was uploaded on 03/26/2012 for the course AC505 AC505 taught by Professor Dillan during the Spring '10 term at Keller Graduate School of Management.
- Spring '10