Magenta Ltd Uses a Job Order Costing System and Applies

question 10

Short Answer

Magenta Ltd uses a job order costing system and applies factory overhead,based on direct labour hours,at a rate of $2 per direct labour hour.The data relating to production for last period is: $\begin{array}{lr}\text { Direct materials } & \$ 13000 \\\text { Indirect materials } & 2300 \\\text { Direct labour (18000 hours) } & 54000 \\\text { Production supervisor salaries } & 13700 \\\text { Maintenance costs } & 7000 \\\text { Factory rent } & 8100 \\\text { Factory utilities } & 1800 \\\text { Depreciation on machinery } & 2200\end{array}$

The overhead under or over-applied after ov erhead has been charged to production is:
a. $\$ 900$ over-applied
b. $\$ 900$ under-applied
c. $\$ 2700$ over-applied
d. $\$ 2700$ under-applied

Understand the impact of time periods and interest rates on financial formulas and calculations.

Apply precision in mathematical calculations by rounding to the nearest cent or appropriate significant figures.

Understand the characteristics and implications of different contract terms in commercial transactions.

Identify the rights and obligations of parties within various types of sales contracts.

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Definitions:

Segment Profit or Loss

The financial performance of a distinct unit within a company, often evaluated to assess its contribution to the overall business.

U.S. GAAP

United States Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in the United States.

Expenses

The costs incurred by a business in the process of earning revenue, such as rent, salaries, and utilities, excluding the cost of goods sold.

Domestic Country

The country in which a company is headquartered or operates primarily.