Deltan Corp

question 75

Multiple Choice

Deltan Corp.allocates overhead to production on the basis of direct labor costs.If Deltan's total estimated overhead is $450,000 and estimated direct labor cost is $180,000,determine the amount of overhead to be allocated to finished goods inventory.There is $20,000 of total direct labor cost in the jobs in the finished goods inventory.

• A) $8,000
• B) $20,000
• C) $70,000
• D) $50,000
• E) $90,000

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Definitions:

Blending Department

A production department focused on combining various raw materials or components into a final product in a consistent and homogeneous manner.

Weighted-Average Method

An inventory costing method that averages out all costs of inventory available for sale during the period.

Process Costing System

An accounting method used where similar goods are produced in a continuous process, distributing costs over the units produced, making it easier to ascertain per unit cost.

Weighted-Average Method

A method of inventory costing that assigns a weighted average cost to each item in inventory, used in both perpetual and periodic inventory systems.