The Work in Process Inventory Account of a Manufacturing Company

question 40

Multiple Choice

The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:

• A) 80%
• B) 125%
• C) 300%
• D) 240%

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Definitions:

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