Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 70% of direct Labour cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company:
-The balance on August 1 in the Raw Materials Stock account was:

A)£4,500.
B)£7,000.
C)£9,000.
D)£11,500.

Question

Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 70% of direct Labour cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company:
-The balance on August 1 in the Raw Materials Stock account was:

A)£4,500. 
B)£7,000. 
C)£9,000. 
D)£11,500.

Quizplus · Accepted Answer

The Answer is C

Loraine Company Applies Manufacturing Overhead to Jobs Using a Predetermined