The Bristol Company Uses a Job-Order Cost System In the Previous Question Overhead Is Charged to Production at Data

question 68

Multiple Choice

The Bristol Company uses a job-order cost system. The following data were recorded for June: $\begin{array}{lrr}& \text {June 1 } && \text {Added During June } \\ &\text {Work in Process } & \text { Direct} & \text {Direct}\\\\\end{array}$
$\begin{array}{lrr}\text { Job Number} &\text { Stock }& \text { Materials }&\text { Labour }\\235 & £ 2,500 & £ 600 &£ 400 \\236 &£ 1,500 & £ 800 & £ 1,000 \\237 & £ 1,000 & £ 1,200 & £ 1,750 \\238 & £ 800 & £ 1,500 &£ 2,250 \end{array}$


In the previous question overhead is charged to production at 80% of direct materials cost. Jobs 235, 237, and 238 were completed during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers.
Assume that the company wants to recalculate the overhead rate and now wants to charge overhead to production at 75% of direct material cost. Bristol Company's cost of goods sold for June would change to:

• A)£15,520.
• B)£10,170.
• C)£ 9,625.
• D)£14,640.

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Definitions:

Underpriced

Describes securities or assets that are selling for a price believed to be below their intrinsic or true value.

Expected Rate

The anticipated return on an investment under normal circumstances, often estimated based on historical data and analysis.

Capital Asset Pricing Model

A framework that explains the connection between inherent risk and anticipated return on investments, especially in the context of equities.

Beta

A measure of a stock's volatility in relation to the overall market, indicating how much the stock price is expected to fluctuate.