Sai Company Uses a Job Order Cost System and Applies

question 46

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:
$\begin{array}{|l|r|}\hline \text { Direct materials: } & \$ 4,000 \\\hline \text { Direct labour: } & \$ 1,500 \text { (at } \$ 5.00 \text { per direct labour hour) } \\\hline\end{array}$

-Suppose Job #461 contained 100 units.What unit cost would appear on the job cost sheet for job #461?

• A) $55.00 per unit.
• B) $61.00 per unit.
• C) $61.75 per unit.
• D) $62.50 per unit.

---

Definitions:

Rationality

The quality of being based on or in accordance with reason or logic, often guiding decision-making processes.

Planning And Efficiency

The process of organizing activities in a way that maximizes productivity and minimizes waste or unnecessary effort.

Rational-Legal Authority

A form of leadership in which authority is legitimized by legal rules and regulations that are formally established.

Organizational Rules

Established guidelines and procedures within an organization that govern the behavior of its members and the operation of the organization itself.