Multiple choice questions on Predetermined overhead rate.
1. A company expected its annual overhead costs to be $600,000 and direct labor costs to be $1,000,000. Actual overhead was $580,000, and actual labor costs totaled $1,100,000. How much is the company's predetermined overhead rate to the nearest cent?
a. $0.58
b.$0.53
c.$0.60
d.$0.55
2. If the total manufacturing costs are greater than the cost of goods manufactured, which of the following is correct?
a.Work in Process Inventory has increased.
b.Finished Goods Inventory has increased.
c.Work in Process Inventory has decreased.
d.Finished Goods Inventory has decreased.
3. For the work of factory employees to be considered as direct labor, the work must be conveniently and
a.Materially associated with raw materials conversion.
b.Periodically associated with raw materials conversion.
c.Physically associated with raw materials conversion.
d.Promptly associated with raw materials conversion.