Star Company's Accountants Estimate Total Overhead for Each Month Will

question 63

Multiple Choice

Star Company's accountants estimate total overhead for each month will be $64,000. They will allocate overhead on the basis of direct labour cost. During the current month, three jobs were worked on: $\begin{array}{llll}&\text { Job 745 } & \text { Job 746 } & \underline{\text { Job 747 }}\\\text { Direct material } & \$ 36,000 & \$ 56,000 & \$ 24,000 \\\text { Direct labour } & \$ 56,000 & \$ 72,000 & \$ 40,000\end{array}$ Job 745 was completed and sold, Job 746 was completed and Job 747 is still in process. Budgeted direct labour cost for the month was $160,000 and actual overhead was $65,800.
Assuming overhead was $100 underapplied and that this amount is considered immaterial, the final adjusted balance of cost of goods sold is:

• A) $92,100
• B) $211,900
• C) $114,500
• D) $79,900

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Definitions:

Recognition

Acknowledgment or appreciation of someone's effort, achievement, or status.

Recall

The act of remembering or recollecting past experiences or information.

Priming

A method for measuring implicit memory in which a person reads or listens to information and is later tested to see whether the information affects performance on another type of task.

Three-Box Model

A model of memory that suggests information processing in three stages: sensory memory, short-term memory, and long-term memory.