Tiff Corporation Has Two Production Departments, Casting and Assembly

question 113

Multiple Choice

Tiff Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: During the current month the company started and finished Job P131. The following data were recorded for this job:
The predetermined overhead rate for the Casting Department is closest to:

• A) $9.40 per machine-hour
• B) $7.60 per machine-hour
• C) $1.80 per machine-hour
• D) $31.96 per machine-hour

Understand the function and recording of adjusting entries in the accounting cycle.

Comprehend the concept and application of accrual accounting versus cash basis accounting.

Describe the purpose of adjusted and unadjusted trial balances and their roles in preparing financial statements.

Differentiate between the various types of adjusting entries: prepaid expenses, unearned revenues, accrued revenues, and accrued expenses.

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Definitions:

Opportunity Costs of War

The economic resources and benefits that are forgone by engaging in war, including the impact on trade, development, and the allocation of government spending.

International Trade

The international transfer of goods, services, and capital across national boundaries or regions.

Barriers to Free Trade

Restrictions, such as tariffs, quotas, and regulations, imposed by governments to control international trade and protect domestic industries.

International Allocation

The distribution of resources, goods, or capital among countries around the globe according to various economic factors and policies.