The Work in Process Inventory Account of a Manufacturing Company

question 142

Multiple Choice

The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company's overhead application rate is:

• A) 50% of direct labor cost.
• B) 80% of direct labor cost.
• C) 300% of direct labor cost.
• D) 40% of direct labor cost.
• E) 200% of direct labor cost.

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Definitions:

CHEDDAR Format

An acronym for a comprehensive technique used in medical documentation that stands for Chief Complaint, History, Examination, Details, Drugs and dosages, Assessment, and Return visit information.

Professional Record

A documented history of an individual's professional achievements, skills, education, and employment history.

Source-oriented Medical Records

An organizational scheme for healthcare documentation where information is grouped according to the source or department that provided the data, making it easier to track specific types of information.

Medical Assistant

A healthcare professional who performs administrative and clinical tasks to support the work of physicians and other health professionals.