Kilo Company Has a Job-Costing System Kilo Applies Overhead to Production on the Basis of Direct

question 146

Essay

Kilo Company has a job-costing system.The following items appeared in the work-in-process account during January of the current year: $\begin{array}{lr}\text { January } 1 \text { bal ance } & \$ 20,000 \\\text { Materials placed into production } & ? \\\text { Direct labour (4,000 hours) } & \$ 120,000 \\\text { Factory overhead applied } & \$ 96,000 \\\text { Cost of goods manufactured } & \$ 400,000 \\\text { January 30 balance } & \$ 16,000\end{array}$ Kilo applies overhead to production on the basis of direct labour hours.Job XX,the only job in process on January 30,has been charged $10,600 materials cost and has 100 labour hours of direct labour time assigned to it.
Required: A. Determine the predetermined factory overhead rate for Kilo Company.
B. Determine the amounts of materials, direct 1 abour, and factory overhead included in the January 30 work in process.
C. Determine the amount of materials placed into production during January.

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Definitions:

Majority Voting

A voting system in which decisions are made based on the majority of votes received, often used in elections and organizational decision-making processes.

Principal-Agent Problem

A scenario in which conflicts of interest arise because the goals of a principal (e.g., a shareholder) do not align with those of an agent (e.g., a company executive).

Moral Hazard Problem

The possibility that individuals or institutions will behave more recklessly after they obtain insurance or similar contracts that shift the financial burden of bad outcomes onto others. Example: A bank whose deposits are insured against losses may make riskier loans and investments.

Adverse Selection Problem

A problem arising when information known to one party to a contract or agreement is not known to the other party, causing the latter to incur major costs. Example: Individuals who have the poorest health are most likely to buy health insurance.