Sai Company Uses a Job Order Cost System and Applies

question 52

Multiple Choice

Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours. The following data were extracted from the company's accounting records for Year 6
$\begin{array}{|l|r|r|}\hline & \text { Estimated } & \text { Actual } \\\hline \begin{array}{l}\text { Manufacturing overhead } \\\text { costs }\end{array} & \$ 50,000 & \$ 54,000 \\\hline \text { Direct labour hours } & 20,000 \text { hours } & 24,000 \text { hours } \\\hline\end{array}$
Job \#461 was completed during the year and the following costs had been incurred on that job:
$\begin{array}{|l|r|}\hline \text { Direct materials: } & \$ 4,000 \\\hline \text { Direct labour: } & \$ 1,500 \text { (at } \$ 5.00 \text { per direct labour hour) } \\\hline\end{array}$

-What was the underapplied or over applied overhead for the year?

• A) $6,000 overapplied.
• B) $4,000 underapplied.
• C) $10,000 underapplied.
• D) $10,000 overapplied.

---

Definitions:

Life's Challenges

Difficulties or obstacles that are encountered during the course of one's life, requiring personal adaptation or resolution.

Adler

Alfred Adler was an Austrian medical doctor and psychotherapist, founder of Individual Psychology, which emphasizes the importance of feelings of inferiority and the creative self in shaping personality.

Behaviourist Theory

A psychological approach focusing on observable behaviours and external stimuli, while discounting internal states like thoughts and emotions.

Reinforcement

In behavioral psychology, it refers to a stimulus or event that increases the likelihood of the recurrence of a particular behavior.