The Work in Process Stock Account of a Manufacturing Firm

question 38

Multiple Choice

The Work in Process Stock account of a manufacturing firm shows a balance of £3,000 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of £500 and £300 for materials, and charges of £400 and £600 for direct Labour. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct Labour costs, of

• A)83%
• B)120%
• C)40%
• D)300%

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Definitions:

Laissez-faire

An economic philosophy of free-market capitalism that opposes government intervention.

Reciprocal

involving mutual exchange or sharing between two or more parties.

Authoritarian

Characterizing a system of government or leadership where control is held by a single ruler or small group, often lacking democratic participation or personal freedoms.

Role Playing

A technique or exercise where individuals act out roles or scenarios to develop skills, solve problems, or gain an understanding of different perspectives.