Managerial Accounting Chapter 2

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

What is the predetermined overhead rate for the Packaging Department?

$10.51 per DLH

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

Bill Of Materials

Companies can improve job cost accuracy by using ________.

Multiple predetermined overhead rates

Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively. If Job X23 used 100 direct labor-hours to produce 50 audio controllers, what is this job's unit product cost (per audio controller)?

$124

Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at 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?

$4,000

Mansfield, Incorporated, has two production departments, Assembly and Packaging. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The predetermined overhead rate in the Assembly Department is based on machine hours (MHs) and it is based on direct labor-hours (DLHs) in the Packaging Department. At the beginning of the year, the company made the following estimates: What is the estimated total manufacturing overhead in the Assembly Department?

$595,200

Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively. If Job X23 used 100 direct labor-hours, what is the total cost assigned to this job?

$6,200

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 adjustment for overapplied overhead ________.

Decreases cost of goods sold and increases net operating income

When all of a company's job cost sheets are viewed collectively they form what is known as a ________.

Subsidiary Ledger

What is the term used when a company applies less overhead to production than it actually incurs?

Underapplied

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

Luthan Company uses a plantwide predetermined overhead rate of $23.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $278,400 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $269,000 and 12,100 total direct labor-hours during the period. Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

Manufacturing Overhead Applied

Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 27,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $556,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris's actual manufacturing overhead cost for the year was $695,546 and its actual total direct labor was 27,500 hours. Compute the company's plantwide predetermined overhead rate for the year. (Round your answer to 2 decimal places.)

Predetermined overhead rate:

Newhard Company assigns overhead cost to jobs on the basis of 115% of direct labor cost. The job cost sheet for Job 313 includes $24,615 in direct materials cost and $10,900 in direct labor cost. A total of 1,550 units were produced in Job 313. a. What is the total manufacturing cost assigned to Job 313? b. What is the unit product cost for Job 313?

a. Total Manufacturing Cost: b. Unit Product Cost: