Worrell Corporation Has a Job-Order Costing System Worrell Applies Overhead at a Predetermined Rate of 90% of in the Work

question 71

Multiple Choice

Worrell Corporation has a job-order costing system.The following debits (credits) appeared in the Work in Process account for the month of March:
$\begin{array}{|l|r|}\hline \text { March 1, balance } & \$ 12,000 \\\hline \text { March 31, direct materials } & 40,000 \\\hline \text { March 31, direct labour } & 30,000 \\\hline \text { March 31, manufacturing overhead applied } & 27,000 \\\hline \text { March 31, to finished goods } & (100,000) \\\hline\end{array}$
Worrell applies overhead at a predetermined rate of 90% of direct labour cost.Job No.232,the only job still in process at the end of March,has been charged with manufacturing overhead of $2,250.What was the amount of direct materials charged to Job No.232?

• A) $2,250.
• B) $2,500.
• C) $4,250.
• D) $9,000.

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Definitions:

Recognition

In accounting, recognition refers to the process of including an item in the financial statements of an entity, acknowledging it as an asset, liability, revenue, or expense.

Unrealized Holding

Refers to the increase or decrease in the value of an investment that has not yet been sold by the holder.

Realized Gains

Profits made from selling an asset at a higher price than its purchase cost, which has been actually earned and can be reported in financial statements.

Available-for-Sale Securities

Financial assets that are held for sale in the short term and which can be converted into cash, generally classified as current assets.