Use the Information Below to Answer the Following Question(s)

question 67

Multiple Choice

Use the information below to answer the following question(s) .
Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, the actual costs incurred in the two departments were as follows:
Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production.
-In the service sector,

• A) direct labour costs are always easy to trace to jobs.
• B) a budgeted direct labour cost rate may be used to apply direct labour to jobs.
• C) normal costing may not be used.
• D) overhead is always applied using an actual cost allocation rate.
• E) cost of goods sold includes beginning service inventory.

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Definitions:

Experiential System

A psychological concept referring to the processing of information based on emotions and personal experiences, as opposed to analytical reasoning.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, stemming from psychological desires or needs.

Explicit Attitudes

Clearly expressed or openly declared views or opinions that one is consciously aware of holding.

Consciously Aware

The state of being fully alert, aware, and attentive to one's surroundings and internal states or processes.