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

question 56

Multiple Choice

Levron Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed:

-The predetermined overhead rate is closest to:

• A) $2.90 per machine-hour
• B) $2.00 per machine-hour
• C) $4.90 per machine-hour
• D) $6.90 per machine-hour

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Definitions:

Operating Cash Inflow

Cash generated from a company's primary business operations, excluding non-operational sources like investments or financing.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of maximizing a firm's value through strategic asset allocation.

Straight-Line Depreciation

A depreciation method where an asset's purchase cost is uniformly divided across its usable life, providing an equal expense charge each year.

After-Tax Discount Rate

The interest rate used to discount future cash flows to their present value after accounting for the effects of taxes.