question 13
Multiple Choice
Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 114,000 and estimated factory overhead was $695,400. The following information was for September. Job X was completed during September, while Job Y was started but not finished. September 1, inventories: Materials Work-in-process (All Job X) Finished goods Materials purchases Direct materials requisitioned: Job X Job Y Direct labor hours: Job X Job Y Labor costs incurred: Direct labor ( $6.00 per hour) Indirect labor Factory supervisory salaries Rental costs: Factory Administrative offices Total equipment depreciation costs: Factory Administrative offices Indirect materials used $9,00037,40080,400$125,000$54,50040,0005,0004,500$57,00016,2007,200$8,4002,200$9,0001,900$14,400 The total cost of Job X is:
Describe the differences between depreciation expense and accumulated depreciation.
Calculate depreciation using the straight-line method.
Explain the process of preparing a worksheet and the importance of adjustments for accurate financial reporting.
Understand ethical and legal guidelines in the billing and collection process.
Definitions:
Production Costs
The total expenses incurred in the manufacture of a product, including raw materials, labor, and overhead.
Economic Profits
The surplus left after deducting both explicit and implicit costs from total revenues.
Savings Account
A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.
Interest Rate
The cost of borrowing money or the return on investment expressed as a percentage, typically on an annual basis.