The Work in Process Inventory Account of a Manufacturing Company

question 196

Multiple Choice

The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company's overhead application rate is:

• A) 40% of direct labor cost.
• B) 50% of direct labor cost.
• C) 80% of direct labor cost.
• D) 200% of direct labor cost.
• E) 300% of direct labor cost.

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Definitions:

Family-Friendly Benefits

Employee benefits designed to support employees’ family obligations, such as flexible working hours and parental leave.

Adaptive Employee Benefits

Flexible benefits programs designed to meet the diverse needs of employees.

Balanced Scorecard Systems

A strategic planning and management system that organizations use to communicate what they are trying to accomplish, align the day-to-day work that everyone is doing with strategy, monitor organization performance against strategic goals, and improve various internal functions as well as external outcomes.

Employer-Required Benefits

Benefits that employers are mandated by law to provide to their employees, such as social security, workers compensation, and unemployment insurance.