Bates Manufacturing Uses a Job Order Cost System,and Overhead Is

question 35

Multiple Choice

Bates Manufacturing uses a job order cost system,and overhead is applied on the basis of direct labor hours.At the beginning of the period,the company estimated that overhead would be $64,000 and 10,000 direct labor hours would be worked.Two projects were started and completed in the current accounting period.The following transactions were completed during the period:
(a) Used $10,000 of direct material on Project I and $6,800 of direct material on Project II.
(b) Labor costs for the two jobs amounted to the following: Project I,$24,000 (2,000 hours) ;Project II,$44,000 (6,000 hours) .
(c) Project II was sold during the period for $120,000.
The company's gross margin for the period was: (Do not round your intermediate calculation. ) :

• A) $30,800.
• B) $18,000.
• C) $89,200.
• D) $69,200.