work in process and finished goods inventories. Its production costs for the period are: direct materials, $45,000; direct labor, $35,000; and overhead applied, $38,500. What is 24. A company's cost accounting system uses direct labor costs to apply overhead to its predetermined overhcad allocation rate? A.10% 110% 86% D. 91% 25. If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for S8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale? A. $8.00. B. S5.50. C. $2.50. D. $1.60. E. S0.90. 26. At the end of its current year, a company learned that its overhead was under-applied by $1,500 and that this amount is not considered material. Based on this information, the journal entry the company should make will A. B. C. D. Close the $1,500 to Finished Goods Inventory. Close the $1,500 to Cost of Goods Sold. Carry the $1,500 to the next period. Do nothing about the $1,500 because it is not material and it is likely that overhead will be over-applied by the same amount next year Carry the $1,500 to the income statement as "Other Expense." E. 27. Equivalent units of production are equal to A. Physical units that were completed this period from all effort being applied to them. B. The number of units introduced into the process this period. C. The number of finished units actually completed this period. D. The number of units that could have been started and completed given the cost incurred The number of units in the process at the end of the period. E