The Collins Company Uses a Job-Order Cost System and Applies

question 6

Essay

The Collins Company uses a job-order cost system and applies manufacturing overhead cost to jobs on the basis of the cost of materials used in production.At the beginning of the most recent year,the following estimates were made as a basis for computing the predetermined overhead rate for the year: manufacturing overhead cost,$200,000;direct materials cost,$160,000.The following transactions took place during the year (all purchases and services were acquired on account):
a.Raw materials purchased,$86,000.
b.Raw materials requisitioned for use in production (all direct materials),$98,000.
c.Utility costs incurred in the factory,$15,000.
d.Salaries and wages incurred as follows:

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Definitions:

Public Policy

Principles and standards regarded by the legislative or judicial branches of government as being of fundamental concern to the state and its citizens.

Invalid Assignment

The transfer of rights or benefits under a contract that is not permitted or recognized by law, rendering it void.

Consideration

Something of value exchanged between parties in a contract, required for the agreement to be legally binding.

Liability Insurance

A form of insurance coverage that protects an individual or business from the risk associated with being found legally liable for various kinds of wrongs such as accidents or injuries.