The Samuelson Company Uses a Job-Order Costing System Overhead Is Charged to Production at 70% of the Direct

question 10

Multiple Choice

The Samuelson Company uses a job-order costing system.The following data were recorded for June:
$\begin{array}{|l|r|r|r|}\hline & &{\text { Added During June }} \\\hline \text { Job Number } & \begin{array}{r}\text { Work in Process } \\\text { Inventory, June 1 }\end{array} & \text { Direct Materials } & \text { Direct Labour } \\\hline 475 & \$ 1,000 & \$ 400 & \$ 200 \\\hline 476 & 900 & 600 & 800 \\\hline 477 & 800 & 900 & 1,400 \\\hline 478 & 600 & 1,000 & 1,900 \\\hline\end{array}$
Overhead is charged to production at 70% of the direct materials cost.Jobs 475,477,and 478 have been delivered to the customer.What was Samuelson's Work in Process inventory balance for Job 476 on June 30?

• A) $6,450.
• B) $2,860.
• C) $2,300.
• D) $2,720.

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Definitions:

Straight Line Amortization

A method of allocating an asset's cost evenly across its useful life.

Fair Values

An estimate of the market value of an asset or liability based on current market prices or valuations.

Retained Earnings

The cumulative amount of profits that a company has earned, less any dividends or other distributions to shareholders over its life.

Investment in Stanton Inc.

The total financial outlay made by an entity to purchase shares or a stake in Stanton Inc., reflecting an investment decision.