A Manufacturing Company Uses a Job Order Cost Accounting System

question 63

Multiple Choice

A manufacturing company uses a job order cost accounting system.Overhead is applied using pounds of direct materials used as an allocation base.Total costs for a particular job were $5,720.Of this amount $2,600 was direct labor and $1,040 was direct material.The company pays $26 per hour of direct labor and $2 per pound of direct materials.What is this company's overhead rate?

• A) $2 per pound of direct material used.
• B) $1,040 per pound of direct material used.
• C) $520 per pound of direct material used.
• D) $4 per pound of direct material used.
• E) $2,080 per pound of direct material used.

---

Definitions:

Consumption

The use of goods and services by households or the economy, often seen as a primary indicator of economic health.

Revealed Preferences

A concept in economics that studies consumer behavior based on the choices they make, revealing their preferences.

Francs

A former currency of France, which was replaced by the Euro.

Consumption

The act of utilizing economic goods to satisfy needs or desires.