Bear Claw Industries Uses a Job-Order Costing System The Following Information Was Available for Job No

question 24

Multiple Choice

Bear Claw Industries uses a job-order costing system. The Molding Department applies overhead based on machine hours, while the Assembly Department applies overhead based on direct labor hours. The company made the following estimates at the beginning of the current year: $$\begin{array} { l c c } \text { Manufacturing overhead cost } & \text { Molding } & \text { Assembly }\\\text { Machine hours } & \$ 700,000 & \$ 400,000 \\\text { Direct labor hours } & 10,000 & 4,000 \\& 12,000 & 16,000\end{array}$$
The following information was available for Job No. 7-29, which was started and completed during August: $\begin{array}{lcc}&\text { Job No. } 7-29\\&\text { Molding } & \text { Assembly }\\\text { Direct materials } & \$ 3,500 & \$ 7,500 \\\text { Direct labor } & \$ 9,000 & \$ 12,500 \\\text { Direct labor hours } & 900 & 1,250 \\\text { Machine hours } & 500 & 400\end{array}$
The predetermined overhead rate for the molding department is

• A)$100.
• B)$83.
• C)$70.
• D)$50.

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Definitions:

Premium on Stock

The amount by which the sale price of a stock exceeds its par value, often occurring when investors view the company as having strong future prospects.

Par Value

Par value is a nominal or face value assigned to a share of stock or bond when it is issued, which has little significance today but was historically the legal capital of the share.

Capital Gain

The profit earned from the sale of an asset or investment exceeding its purchase price.

Paid-In Capital

The total amount of money shareholders have invested in a company through the purchase of stock, excluding any stock purchased on secondary markets.