Reference no: EM132967671

Problem 1: The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $300 and $500 for direct labour. From this information, what predetermined overhead rate, as a percentage of direct labour costs, does the company appear to be using?

a) 80%

b) 125%

c) 240%

d) 300%

Problem 2: If a company uses two different unit cost figures to cost transfers from one department to another under a process costing system, then which of the following statements is reasonable to assume?

a) There was no beginning work-in-process inventory

b) Processing centres are arranged in a sequential pattern

c) The FIFO cost method is being used

d) The weighted-average cost method is being used