Moran Company Uses a Job Order Cost System and Has

question 72

Multiple Choice

Moran Company uses a job order cost system and has established a predetermined overhead application rate for the current year of 150% of direct labor cost,based on budgeted overhead of $900,000 and budgeted direct labor cost of $600,000.Job No.1 was charged with direct materials of $36,000 and with overhead of $27,000.What is the total cost of Job No.1?

• A)$64,000
• B)$81,000
• C)$91,000
• D)Cannot be determined without additional information.

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Definitions:

Joint Costs

Costs incurred during the production process that are shared among two or more products.

Allocating Joint

The process of distributing joint costs to different products or departments that share common processes or resources.

Common Methods

Standardized approaches or techniques applied in various fields or processes, such as accounting or research.

Conversion Costs

Expenses incurred in the process of converting raw materials into finished products, including labor and overhead costs.