Hamilton Pty Ltd Uses a Standard Costing System for Product

question 24

Multiple Choice

Hamilton Pty Ltd uses a standard costing system for product costing.The company uses direct labour hours as the cost driver to apply overhead costs.The following amounts were budgeted for the year:
The following were the actual results:
Calculate the amount of overhead cost applied to work in process inventory.

• A) $1 520 000
• B) $1 536 000
• C) $1 550 000
• D) $1 600 000

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Definitions:

Accounting Records

Documentation and books that keep track of the financial transactions of a business or individual, forming the basis for its financial statements.

Asset

Resources controlled by a business from which future economic benefits are expected to flow to the business, including both physical items and intangible properties.

Credit

An entry on the right side of a double-entry bookkeeping system that increases liabilities and equity or decreases an asset or expense.