Direct Direct Direct Materials Labour Cost Labour Hours

question 115

Multiple Choice

Direct Direct Direct Materials Labour Cost Labour Hours
Job 400 $200 $800 40
Job 401 250 200 10
Job 402 500 600 32
O'Hare Sisters Manufacturing uses job costing and applies overhead using a normal costing system using direct labour hours as the allocation base. This period's estimated overhead cost is $400,000, estimated direct labour cost is $500,000 and estimated direct labour hours are 25,000. This period's actual overhead cost was $420,000, actual direct labour cost was $390,000, and actual direct labour hours were 20,000.
What is the total manufacturing cost of Job 400?

• A)$1,200
• B)$1,000
• C)$1,320
• D)$1,640

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Definitions:

Individual Assets

Specific items of property owned by an individual or entity, including tangible and intangible assets.

Straight-line Depreciation

A technique for distributing the expense of a physical asset across its lifespan in uniform yearly sums.

Plant Asset

An asset used in the operations of a business that is not intended for sale to customers and is referred to as property, plant, and equipment (PP&E) in accounting.

Adjusting Journal Entries

Journal entries made at the end of an accounting period to update certain accounts and ensure they accurately reflect the financial status of the business.