ACC 213 Chapter 2
Grey Corporation is a manufacturer of custom photo books. The company uses machine printing time as the allocation base for applying manufacturing overhead to its products. Summary data about the company's operations is as follows: Total manufacturing cost: $120,000 per year Allocation base; Machine time per custom photo book : 15 seconds per customer photo book Capacity: 800,000 custom photo books per year Budgeted output for next year: 500,000 custom photo books per year Based on the data provided in the table, what is the predetermined overhead rate based on capacity?
$0.01 per second
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 per machine hour
Grey Corporation is a manufacturer of custom photo books. The company uses machine printing time as the allocation base for applying manufacturing overhead to its products. Summary data about the company's operations is as follows: Total manufacturing cost: $120,000 per year Allocation base; Machine time per custom photo book : 15 seconds per customer photo book Capacity: 800,000 custom photo books per year Budgeted output for next year: 500,000 custom photo books per year Based on the data provided in the table, what is the predetermined overhead rate based on budgeted output?
$.016 per second
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
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
Companies can improve job cost accuracy by using ________
Multiple predetermined overhead rates
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
The adjustment for overapplied overhead ________
decreases cost of goods sold and increases net operating income
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
The direct materials required to manufacture each unit of product are listed on a
Bill of materials
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
Mansfield, Inc., 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: Direct labor-hours 5,200 62,000 Machine-hours 68,400 11,900 Total fixed manufacturing overhead cost. $390,000. $419,000 Variable manufacturing overhead per DLH $3.75 Variable manufacturing overhead per MH. $3.00 1. What is the estimated total manufacturing overhead in the Assembly Department? 2. What is the predetermined overhead rate for the Packaging Department?
1. $595,200 2. $10.51 per DLH