Prather Corporation Uses a Job-Order Costing System with a Single

question 281

Multiple Choice

Prather Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Recently, Job P513 was completed with the following characteristics:
The estimated total manufacturing overhead is closest to:

• A) $475,000
• B) $285,000
• C) $190,000
• D) $285,004

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Definitions:

Output Produced

The total amount of goods and services produced by an entity during a specific period.

Fixed Costs

Expenses that do not change with the amount of goods or services produced by a business, such as rent, salaries, and insurance.

Accounting Break-even

The point at which a business's revenues equal its expenses, resulting in no net profit or loss, as determined by accounting methods.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much revenue contributes to fixed costs and profit.