The Work in Process inventory account of a manufacturing firm shows a balance of $3,000 at the end of an accounting period. The job cost sheets of the only two uncompleted jobs show charges of $500, & $300 for materials, & charges of $400 & $600 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) 83%. B) 120%. C) 40%. D) 300%

Question

Mateo Peck

Business

9 August, 08:58

The Work in Process inventory account of a manufacturing firm shows a balance of $3,000 at the end of an accounting period. The job cost sheets of the only two uncompleted jobs show charges of $500, & $300 for materials, & charges of $400 & $600 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) 83%. B) 120%. C) 40%. D) 300%

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Answers (1)

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Collin Tucker · Answer 1

Overhead rate = 1.2

Explanation:

Giving the following information:

The Work in Process inventory account of a manufacturing firm shows a balance of $3,000 at the end of an accounting period.

Direct material = $500, & $300

Direct labor = $400 & $600

Manufacturing overhead = ?

Work in process = direct material + direct labor + manufacturing overhead

3000 = 800 + 1000 + MOH

3000-800-1000 = MOH

1200 = MOH

Overhead rate = moh/direct labor

Overhead rate = 1200/1000 = 1.2