Selected Data from Sheridan Corporation's Year-End Financial Statements Are Presented

question 19

Multiple Choice

Selected data from Sheridan Corporation's year-end financial statements are presented below.The difference between average and ending inventory is immaterial.
What were Sheridan's sales for the year?

• A) $240,000.
• B) $480,000.
• C) $800,000.
• D) $1,200,000.Sales = (60,000 * 8)/(1 - .40)

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Definitions:

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to individual products based on a certain activity base.

Normal Cost System

A costing system in which overhead costs are applied to a job by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job.

Job Cost Sheet

A document that records the materials, labor, and manufacturing overhead costs assigned to each individual job in production.

Predetermined Overhead Rate

An established cost allocation rate that assigns expected indirect costs to products or services based on a chosen activity base.