1. Bob Inc. has commenced work on three jobs during its first year of operations. Costs incurred for each of these jobs are as follows:

	Job 1	Job 2	Job 3
Direct Materials	$ 110,000	160,000	220,000
Direct Labour	$ 180,000	220,000	370,000

Overhead is applied to jobs at a rate of $0.20 per direct labour dollar spent. Actual manufacturing overhead costs incurred amounted to $180,000.

To dispose of any over or under-applied overhead, Bob Inc must:

• A.

  Debit Cost of Goods Sold by $26,000

• B.

  Credit Cost of Goods Sold by $22,000

• C.

  Credit Cost of Goods Sold by $32,000

• D.

  Debit Cost of Goods Sold by $65,000

2.

Bob Inc. has commenced work on three jobs during its first year of operations. Costs incurred for each of these jobs are as follows:

	Job 1	Job 2	Job 3
Direct Materials	$ 110,000	160,000	220,000
Direct Labour	$ 180,000	220,000	370,000

Overhead is applied to jobs at a rate of $0.20 per direct labour dollar spent. Actual manufacturing overhead costs incurred amounted to $180,000. Bob Inc's overhead costs for the year were:

• A.

  $22,000 over applied

• B.

  $32,000 under applied

• C.

  $65,000 over applied

• D.

  $26,000 under applied

3.

Bob Inc. has commenced work on three jobs during its first year of operations. Costs incurred for each of these jobs are as follows:

	Job 1	Job 2	Job 3
Direct Materials	$ 110,000	160,000	220,000
Direct Labour	$ 180,000	220,000	370,000

Overhead is applied to jobs at a rate of $0.20 per direct labour dollar spent. Actual manufacturing overhead costs incurred amounted to $180,000.

To dispose of any over or under-applied overhead, Bob Inc must:

• A.

  Debit Cost of Goods Sold by $26,000

• B.

  Credit Cost of Goods Sold by $22,000

• C.

  Credit Cost of Goods Sold by $32,000

• D.

  Debit Cost of Goods Sold by $65,000