The Work in Process Account of Green Manufacturing Shows a Balance

question 4

Multiple Choice

The work in process account of Green Manufacturing shows a balance of $42 000 at the end of an accounting period. The job cost orders of the two uncompleted jobs show charges of $15 000 and $7000 for materials used and charges of $10 000 and $5000 for direct labour used. From this information it appears that the company is using a predetermined overhead rate as a percentage of direct labour costs, of:

• A) 13.5%.
• B) 50.0%.
• C) 33.3%.
• D) 300%.

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Definitions:

Sole Proprietorship

A business structure where a single individual owns, manages, and is responsible for all aspects of the business, including liabilities.

Limited Liability Corporation

A business structure where the owners have limited personal liability for the debts and actions of the corporation.

Corporation

A corporation is a legal entity that is separate from its owners, offering limited liability to its shareholders and having the ability to own property, sue, and be sued.

Professional Corporation

A business entity formed by lawyers, doctors, accountants, and other professionals, offering certain tax and legal advantages.