Question

If Jackson had 15,000 units in ending inventory that were 12% complete for material the number of equivalent units of production in ending inventory would be 1800?

True or False: direct labor and manufacturing overhead are called prime costs.

Bradbeer Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,500 hours. At the end of the year, actual direct labor-hours for the year were 16,000 hours, the actual manufacturing overhead for the year was $233,000, and manufacturing overhead for the year was underapplied by $15,400. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been: 228000 or 217600 or none of the above.

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer Part 1) The equivalent units of material for ending inventory = physical units * % completion of material = 15000*12% = 1800 units 3 Thus the Equivalent units will be 1800, so it is correct and hence true o Part 2) 1 The given statement is False 2 Prime cost comprises of direct material and direct labour and not of manufacturing overheads 4 Part 3) 5 Estimated manufacturing at the beginning of the year 6 = (actual overheads-underapplied overheads)/actual hours *estimated hours 7 = (233000-15400)/16000*17500 8 = 13.6*17500 9 = $ 238000 1 Thus the correct aswer is none of the above