Predetermined rate based on direct labor-hour


Question 1:

Bottum Corporation, a manufacturing company, has provided data concerning its operations for May. The beginning balance in the raw materials account was $21,500 and the ending balance was $36,700. Raw materials purchases during the month totaled $63,200. Manufacturing overhead cost incurred during the month was $111,900, of which $2,500 consisted of raw materials classified as indirect materials. The direct materials cost for May was:

$44,500

$47,500

$45,500

$44,000

Question 2:

Washtenaw Corporation uses a job-order costing system. The following data are for last year:

Estimated direct labor-hours                       12,900
Estimated manufacturing overhead costs    $43,344
Actual direct labor-hours                             10,500
Actual manufacturing overhead costs          $36,800

Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What amount of overhead was applied to work in process last year?

$35,030

$37,880

$35,280

$36,380

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Accounting Basics: Predetermined rate based on direct labor-hour
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