ch 2

In the cost formula (Y = a + bX) that is used to estimate the total manufacturing overhead cost for a given period, the letter "a" refers to the estimated ________.

total fixed manufacturing overhead cost

The direct materials required to manufacture each unit of product are listed on a ________.

no

A normal cost system applies overhead to jobs ________.

by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job

The management of Blue Ocean Company estimates that 50,000 machine-hours will be required to support the production planned for the year. It also estimates $300,000 of total fixed manufacturing overhead cost for the coming year and $4 of variable manufacturing overhead cost per machine-hour. What is the predetermined overhead rate?

$10.00 per machine-hour. First, the estimated total overhead cost = $300,000 + ($4 per MH x 50,000 MHs) = $500,000. Then, the predetermined overhead rate = estimated total overhead cost of $500,000 ÷ 50,000 MHs = $10 per MH.

Spartan Corporation estimates $200,000 as its total manufacturing overhead for an estimated activity level of 10,000 direct labor-hours. What is the amount of manufacturing overhead that would be applied to a job that required 200 direct labor-hours?

4000, The predetermined overhead rate is $20 ($200,000 ÷ 10,000 DLHs). For 200 DLHs, the manufacturing overhead that would be applied is $4,000 ($20 × 200 DLHs).