Chilson Company Manufactures Custom Engines for Use in the Lawn

question 208

Multiple Choice

Chilson Company manufactures custom engines for use in the lawn and garden equipment industry.The company allocates manufacturing overhead based on machine hours.Selected data for costs incurred for Job 612 are as follows: $$\begin{array} { | l | r | } \hline \text { Direct materials used } & \$ 3,500 \\\hline \text { Direct labor hours warked } & 300 \\\hline \text { Machine hours used } & 400 \\\hline \text { Direct labor rate per hour } & \$ 16 \\\hline \text { Predetermined overhead rate based an machine hours } & \$ 18 \\\hline\end{array}$$ What is the total manufacturing cost of Job 612?

• A)$ 4,200
• B)$ 4,800
• C)$ 7,200
• D)$15,500

Differentiate between accounts payable, accrued liabilities, and other types of current liabilities.

Grasp the concept of interest accrual on liabilities and its accounting treatment.

Understand the effect of inventory methods on the accounts payable turnover ratio.

Recognize the nature of current liabilities and how they are reported on the balance sheet.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products or job orders, based on a selected activity base like machine-hours or labor-hours.

Machine-Hours

A measure of production time, representing the number of hours machines are operating.

Manufacturing Departments

Specific areas within a manufacturing facility where different stages of the production process are carried out.

Job A496

A specific, identifiable work task or project within an organization, denoted by its unique job number for tracking and costing purposes.