Figure 4-12 Vaughn, Inc

question 149

Multiple Choice

Figure 4-12 Vaughn, Inc., has identified the following overhead costs and activity drivers for next year:
The following are two of the jobs completed during the year:
The company's normal activity is 2,000 direct labor hours.
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Refer to Figure 4-12.If the four activity drivers are used to allocate overhead costs, total overhead allocated to Job 10A would be

• A) $5,533.
• B) $4,830.
• C) $5,030.
• D) $5,630.

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Definitions:

Expense Warranty Accrual Method

An accounting practice where a company estimates the costs of warranties and records these costs as an expense when the corresponding sales are made.

Modified Cash Basis

An accounting method that combines elements of both cash and accrual accounting, recognizing revenues when they are received and expenses when they are paid, with some adjustments.

Warranty Revenue Recognition

The accounting process of recognizing revenue from warranties provided, typically over the period the warranty covers.

Coupon Redemption

The process of a bondholder or an investor submitting a bond's coupon to the issuer to receive interest payment.