Accounting Chapter 17 Learnsmart/Homework

Each of the following are types of _______ allocation methods: plantwide rate method, departmental overhead rate method and activity based costing method

overhead

The plantwide overhead rate method can be based on each of the following except

supervisor hours

The cost object of the cost assignment under the plantwide overhead rate method is the

unit of product

The overhead rate method which uses a different overhead rate for each department is the

departmental method

Landen company uses a single plantwide overhead rate based on direct labor hours. Total budgeted overhead costs are $200,000. Total budgeted direct materials are $50,000 and total budgeted direct labor hours are 80,000. What is the plantwide overhead rate per direct labor hour?

$2.50

A company uses the departmental overhead rate method. Total overhead costs are $6,000,000. Of this total, the machining department is assigned overhead costs of $4,000,000 and the assembly department is allocated the remainder. The machining department uses machine hours as their allocation base and has 80,000 machine hours. The assembly department uses direct labor hours as their allocation base and has 50,000 direct labor hours. Calculate the overhead rate for the assembly department.

$40 per direct labor hour Reason: $2,000,000/50,000 direct labor hours=$40 per direct labor hour.

The departmental overhead rate method uses a three-step process to allocate cost objects. List these steps in the correct lrder

Assign overhead costs to departmental cost pools, Select an allocation base and compute overhead allocation rate for each department, Allocate overhead costs to cost objects

The ________ overhead rate method uses a different overhead rate per production department.

Departmental

Which of the following are a type of overhead allocation method? (Check all that apply)

Departmental overhead rate method Plantwide overhead rate method Activity based costing method

Select all answers which apply. The plantwide overhead rate can be based on:

Machine hours Direct labor hours

Using a single overhead rate to apply overhead to products is called the

Plantwide overhead rate method.

True or false: The cost object of the plantwide overhead rate method is the unit of product

True

True or false: One of the advantages of the departmental overhead rate method over the plantwide overhead rate method is that in the departmental overhead rate method, individual departments can have their own overhead rate and allocation base.

True

Landen Company uses a single plantwide overhead rate of $100 per direct labor hour (DLH). Landen has two products as follows: basic chairs which used 20 DLH and deluxe chairs which used 35 DLH. What is the total amount allocated to these products?

$5,500 The total is computed as: (35+$20 DLH) x $100=$5,500.

Applying a single overhead rate to all products is known as the _____ overhead rate method.

plantwide