When applying manufacturing overhead to jobs, the formula to calculate the amoun

Question

When applying manufacturing overhead to jobs, the formula to calculate the amount is as follows: A. Predetermined overhead rate divided by the actual manufacturing overhead incurred on the particular job. B. Predetermined overhead rate times the actual manufacturing overhead incurred on the particular job. C. Predetermined overhead rate divided by the actual units of allocation base charged to the particular job. D. Predetermined overhead rate times the actual units of allocation base charged to the particular job. 11. The Cost of Goods Manufactured represents: A. the amount of cost charged to jobs during the period. B. the amount of cost transferred from Finished Goods to Cost of Goods Sold during the period. C. the amount of cost placed into production during the period. D. the cost of goods completed during the current year whether they were started before or during the current year. 12. In job-order costing, all of the following statements are correct with respect to labor time and cost except: A. time tickets are kept by employees showing the amount of work on specific jobs. B. the job cost sheet for a job will contain all direct labor charges to that particular job. C. labor cost that can be traced to a job only with a great deal of effort is treated as part of manufacturing overhead. D. a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job.

Explanation / Answer

1) Formula of Predetermined overhead rate = Manufacturing Overhead cost / total units in the allocation base

From the above formaula we can say Manufacturing Overhead = Predetermined overhead rate times total units

Therefore d option is correct

2) Cost of goods manufactured = Direct Material used + Direct labor used + factory overhead + work in process opening inventory - work in process closing inventory

From the above formula we can say that cost of goods manufactured is cost of goods completed during the year whether they were starting before or during the current year

So d option is correct

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