Reference: 03-08
the Bus Company Uses a Job-Order Costing System

question 40

Multiple Choice

Reference: 03-08
The Bus Company uses a job-order costing system. The following information was recorded for September:
The direct labour wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labour-hour. Jobs 1, 2, and 3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer. $$\begin{array} { | l | l | l | l | } \hline & & { \text { Added During September } } \\\hline \text { Job Number } & \begin{array} { l } \text { September 1 } \\\text { Inventory }\end{array} & \begin{array} { l } \text { Direct } \\\text { Materials }\end{array} & \text { Direct Labour } \\\hline 1 & \$ 1,000 & \$ 300 & \$ 200 \\\hline 2 & 1,400 & 250 & 300 \\\hline 3 & 500 & 1,500 & 150 \\\hline 4 & 750 & 4,000 & 400 \\\hline\end{array}$$
-The Cost of Goods Manufactured for September is:

• A)$10,750.
• B)$7,625.
• C)$11,275.
• D)$5,925.

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Definitions:

Excludable

A feature of a product or service enabling its owner to exclude others from usage unless payment is received.

Property Rights

The legal rights to possess, use, and dispose of assets, including property and intellectual property.

Allocate Resources

The process of assigning available assets, time, and effort to various tasks or purposes in order to achieve specific goals.

Market Failures

Situations where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.