1. Omega Contractors manufactures each house to customer specifications. It most

Question

1. Omega Contractors manufactures each house to customer specifications. It most likely would use: A. Process costing. B. A periodic inventory system C. Unique costing D. Job order costing E. Activity-based costing. 2. A job cost sheet includes A. Direct materials, direct labor, operating costs B. Direct materials, estimated overhead, administrative costs C. Direct labor, actual overhead, selling costs. D. Direct material, direct labor, estimated overhead E. Direct materials, direct labor, selling costs. 3. The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $3,200 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $1,400 and direct labor cost of $800. Therefore, the amount of the applied overhead is: A. $1,800. B. $2,200. C. $1,000. D. $800. E. $2,400.

Explanation / Answer

1. Option D (Job order costing)

2. Option A

3. Option C ($1,000)

1. When products are made according to customer specification, job order costing system is used and jobs(products) are mostly distinct from one another.

2. The job cost sheet records manufacturing costs for a job. This includes direct materials, director labor and manufacturing overhead.

3. Balance in goods in progress, debit $3200 - total material cost $1400 - Total labor cost $800. Applied over head is $1000(3200-1400-800)

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