The Following Selected Data Were Taken from the Books of the Owens

question 33

Multiple Choice

The following selected data were taken from the books of the Owens O-Rings Company.The company uses job costing to account for manufacturing costs.The data relate to April operations.A) Materials and supplies were requisitioned from the stores clerk as follows: Job 405,material X,$7,000.Job 406,material X,$3,000;material Y,$6,000.Job 407,material X,$7,000;material Y,$3,200.For general factory use: materials A,B,and C,$2,300.B) Time tickets for the month were chargeable as follows:
C. Other information:
Factory paychecks for $36,700 were issued during the month.Various factory overhead charges of $19,400 were incurred on account.Depreciation of factory equipment for the month was $5,400.Factory overhead was applied to jobs at the rate of $3.50 per direct labor hour.Job orders completed during the month: Job 405 and Job 406.Selling and administrative costs were $2,100.Factory overhead is closed out only at the end of the year.The balance in the factory overhead account would represent the fact that overhead was:
$$\begin{array} { | l | r | l | } \hline \text { Job 405 } & \$ 11,000 & 3,000 \text { hours } \\\hline \text { Job 406 } & \$ 14,000 & 3,600 \text { hours } \\\hline \text { Job 407 } & \$ 8,000 & 1,900 \text { hours } \\\hline \text { Indirect labor } & \$ 3,700 & \\\hline\end{array}$$

• A) $1,050 underapplied .
• B) $3,150 underapplied .
• C) $1,250 overapplied .
• D) $4,350 overapplied .
• Manufacturing Overhead Control = $2,300 + 3,700 + 19,400 + 5,400 = $30,800 - Applied Manufacturing Overhead $29,750 = $1,050 Underapplied

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Definitions:

Anxiety Reaction

A psychological and physiological response to stress that causes nervousness, fear, apprehension, and worry.

Neurosis

A class of functional mental disorders involving distress but not delusions or hallucinations, where behavior is not outside socially acceptable norms.

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Pertaining to a pattern of antisocial behavior or lack of conscience and empathy, often associated with a personality disorder.

Character Disorders

A diverse group of mental disorders characterized by deeply ingrained, inflexible patterns of thinking, feeling, or relating to others.