23. A company has an overh ead application rate of 125% of direct labor costs. H

Question

23. A company has an overh ead application rate of 125% of direct labor costs. Hove much overhead would be allocated to a job if it required total labor costing $20,000? A. $5,000. B. $16,00o. C. $25,000. D. $125,000. E. $250,000. 24. The B&T; Company's production costs for May are: direct labor, $13,000; indirect labor, $6.500 direct materials, $15,000: property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. B&T; Company's factory overhead incurred for May is: A. $2,000. B. $6,500. C. $8,500 D. $21,500. E. $36,500. 25. Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. What is the ending Raw Materials Inventory balance for March? A. $46,000 B. $11,000 C. $33,000 D. $24,000 E. $9,000

Explanation / Answer

23.

Total labour cost = 20,000

Overhead allocated = 125% of total labour cost

= 20,000 * 125%

= 25,000

The answer is C.

24.

Factory overhead incurred for May = Indirect labour + Property taxes on production equipment + Heat, lights and power + Insurance on plant and equipment

= 6,500 + 800 + 1,000 + 200

= 8,500

The answer is C.

25.

Ending raw material inventory = Beginning raw materials + Raw materials purchased - Raw materials used in production  

= 22,000 + 165,000 [141,000+13,000]

= 33,000

The answer is C

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