The Following Account Balances at the Beginning of January Were

question 326

Multiple Choice

The following account balances at the beginning of January were selected from the general ledger of Ocean City Manufacturing Company: Additional data:1) Actual manufacturing overhead for January amounted to $62,000.
2) Total direct labor cost for January was $63,000.
3) The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year called for $250,000 of direct labor cost and $350,000 of manufacturing overhead costs.
4) The only job unfinished on January 31 was Job No. 151, for which total direct labor charges were $5,200 (800 direct labor hours) and total direct material charges were $14,000.
5) Cost of direct materials placed in production during January totaled $123,000. There were no indirect material requisitions during January.
6) January 31 balance in raw materials inventory was $35,000.
"7) Finished goods inventory balance on January 31 was $34,500.
Has manufacturing overhead been overallocated or underallocated and by what amount as of January 31?"

• A)$26,200 overallocated
• B)$26,200 underallocated
• C)$17,000 overallocated
• D)$17,000 underallocated

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Definitions:

Florence Kelley

Florence Kelley was a social and political reformer in the early 20th century known for her work in child labor laws and improving conditions for working women.

Jane Addams

An American social reformer and founder of Hull House in Chicago, who was a leader in women's suffrage and world peace, also a co-winner of the 1931 Nobel Peace Prize.

Samuel Gompers

An American labor union leader who founded the American Federation of Labor and advocated for workers' rights.

Eugene Debs

An American socialist, political activist, and trade unionist, known for his role in the founding of the Industrial Workers of the World and his five presidential runs as a socialist.