Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:Total machine-hours70,000Total fixed manufacturing overhead cost$294,000Variable manufacturing overhead per machine-hour$2.30Recently, Job M825 was completed with the following characteristics:Number of units in the job20Total machine-hours80Direct materials$665Direct labor cost$1,840The predetermined overhead rate is closest to:
A. $6.50 per machine-hour
B. $4.20 per machine-hour
C. $2.30 per machine-hour
D. $8.80 per machine-hour
Answer: A
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In recessions, the average real return to the stock market is often
A. negative. B. between 0% to 5%. C. between 5% to 10%. D. between 10% to 20%.
The completed-contract method (as opposed to the percentage-of-completion method) of accounting for revenue from long-term construction contracts should be used in which of the following circumstances?
a. The contractor has been in business for many years and has completed many contracts in the past. b. Reasonably accurate estimates of the degree of completion cannot be made due to the lack of experience with similar types of contracts. c. Reasonable accurate estimates of the degree of completion can be made based on past experience. d. The contracts are of a relatively long duration.
Which of the following is/are not true regarding maintenance?
a. Maintenance includes routine costs such as for cleaning and adjusting. b. Maintenance includes the costs of restoring an asset's service potential after breakdowns or other damage. c. Maintenance does not extend the estimated service life or increase its productive capacity of an asset beyond original expectations. d. U.S. GAAP and IFRS treat maintenance expenditures as expenses of the period when the firm makes the expenditure. e. Distinguishing repairs from maintenance is difficult but typically not necessary because expenditures for both are period expenses.
All of the following are true regarding the statement of cash flows except:
A. Noncash activities are investing and financing activities that do not affect cash flows. B. Operating activities include transactions and events that affect net income. C. Investing activities include transactions that affect issuance of common stock. D. Financing activities include transactions that affect long-term liabilities and equity. E. Investing activities include transactions and events that come from the purchase and sale of long-term assets.