Whirl 'N Twirl Corporation Uses a Job Costing System

question 53

Multiple Choice

Whirl 'n Twirl Corporation uses a job costing system. On January 1, Whirl 'n Twirl Corporation's work in process inventory account had a balance of $62,000. During the year, materials requisitioned for use in production amounted to $110,000, of which $79,000 represented direct materials. Factory wages for the period were $242,000, of which $199,000 were for direct labour. Manufacturing overhead is allocated on the basis of 80% of direct labour cost. Actual overhead cost for the year was $125,000. Jobs costing $350,000 were completed during the year. The December 31 work in process inventory balance is

• A) $403,000.
• B) $158,000.
• C) $115,000.
• D) $149,200.

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Definitions:

Ounces

A unit of weight commonly used in the United States and the United Kingdom, equal to one-sixteenth of a pound.

Labor

The human effort, both physical and intellectual, used in the creation of goods and services.

Labor Rate Variance

The difference between the actual labor costs and the standard labor costs expected for the actual production achieved.

Hours

A measurement of time used to quantify the duration of work performed or the operational time of machinery or businesses.