Figure 5-5

question 18

Multiple Choice

Figure 5-5.Brillant Design Company makes custom chairs for individual customers. On October 1, there was one job in process, Job 243, with a cost of $1,300. Jobs 244, 245, and 246 were started during the month of October. Data on costs added during the month are as follows:
Overhead is applied to production at the rate of 70% of direct labor cost. Job 245 was completed on October 14 and the client was billed at cost plus 55%. All other jobs remained in process.
-Refer to Figure 5-5. Calculate the balance in Work-in-Process on October 31.

• A) $17,717
• B) $22,875
• C) $36,653
• D) $32,820
• E) $15,820

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Definitions:

Unit Level Activities

Activities that are performed each time a unit is produced, directly associated with production volume.

Batch Level Activity

Actions or processes that relate to producing a batch of goods or services, often involving costs that change with the number of batches produced rather than individual units.

Medical Clinic

A healthcare facility that primarily focuses on the care of outpatients, offering various medical services and treatments.

Activity-Based Costing

Activity-based costing is a method of allocating overhead costs to specific products or services based on the activities required to produce them, providing a more accurate reflection of the costs associated with each product or service.