ACCT 2302 MANAGERIAL ACCOUNTING CH2

17) The appeal of using multiple departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs.

answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

18) The costs attached to products that have not been sold are included in ending inventory on the balance sheet.

answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

21) A bill of materials is a document that lists the type and quantity of each type of direct material needed to complete a unit of product.

answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

140) Sivret Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $624,000 Variable manufacturing overhead per machine-hour $3.10 Recently, Job M598 was completed with the following characteristics: Number of units in the job 60 Total machine-hours 300 Direct materials $645 Direct labor cost $9,000 The unit product cost for Job M598 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $65.25 B) $160.75 C) $215.25 D) $43.05

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $624,000 + ($3.10 per machine-hour × 80,000 machine-hours) = $624,000 + $248,000 = $872,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $872,000 ÷ 80,000 machine-hours = $10.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.90 per machine-hour × 300 machine-hours = $3,270 Direct materials $ 645 Direct labor 9,000 Manufacturing overhead applied 3,270 Total cost of Job M598 $ 12,915 Total cost of Job M598 (a) $ 12,915 Number of units (b) 60 Unit product cost (a) ÷ (b) $ 215.25 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

246) Weakley Corporation uses a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $358,000 and 20,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $382,000 and 18,300 total machine-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

answer: Estimated total fixed manufacturing overhead (a) $358,000 Estimated activity level (b) 20,000 machine-hours Predetermined overhead rate (a) ÷ (b) $17.90 per machine-hour Actual activity level 18,300 machine-hours Manufacturing overhead applied $327,570 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

233) Claybrooks Corporation has two manufacturing departments—Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $ 17,700 $ 5,800 $ 23,500 Estimated variable manufacturing overhead cost per MH $ 1.50 $ 2.20 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Casting Department is closest to: A) $1.50 B) $7.40 C) $5.90 D) $6.48

answer: B Explanation: Casting Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 17,700 Estimated variable manufacturing overhead ($1.50 per MH × 3,000 MHs) 4,500 Estimated total manufacturing overhead cost (a) $ 22,200 Estimated total machine-hours (b) 3,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.40 /MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

127) Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 50 Direct materials $920 Direct labor cost $1,400 The total job cost for Job K818 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,675 B) $2,595 C) $1,195 D) $2,320

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $162,000 + ($2.80 per direct labor-hour × 60,000 direct labor-hours) = $162,000 + $168,000 = $330,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $330,000 ÷ 60,000 direct labor-hours = $5.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.50 per direct labor-hour × 50 direct labor-hours = $275 Direct materials $ 920 Direct labor 1,400 Manufacturing overhead applied 275 Total cost of Job K818 $ 2,595 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

187) Janicki Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 23,400 $ 28,200 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job A Job J Direct materials $ 12,000 $ 7,700 Direct labor cost $ 20,700 $ 6,400 Machining machine-hours 700 300 Customizing machine-hours 3,600 5,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round your intermediate calculations to 2 decimal places.) A) $27,595 B) $87,752 C) $82,785 D) $55,190

answer: C Explanation: Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 4,800 Estimated variable manufacturing overhead ($1.10 per MH × 1,000 MHs) 1,100 Estimated total manufacturing overhead cost (a) $ 5,900 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.90 /MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 23,400 Estimated variable manufacturing overhead ($2.50 per MH × 9,000 MHs) 22,500 Estimated total manufacturing overhead cost (a) $ 45,900 Estimated total machine-hours (b) 9,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.10 per MH Manufacturing overhead applied to Job A: Machining ($5.90 per MH × 700 MHs) $ 4,130 Customizing ($5.10 per MH × 3,600 MHs) 18,360 Total manufacturing overhead applied $ 22,490 The selling price for Job A would be calculated as follows: Direct materials $ 12,000 Direct labor cost 20,700 Manufacturing overhead applied 22,490 Total manufacturing cost $ 55,190 Markup (50%) 27,595 Selling price $ 82,785 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

23) In a job-order costing system that is based on machine-hours, which of the following formulas is correct? A) Predetermined overhead rate = Actual manufacturing overhead ÷ Actual machine-hours B) Predetermined overhead rate = Actual manufacturing overhead ÷ Estimated machine-hours C) Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours D) Predetermined overhead rate = Estimated manufacturing overhead ÷ Actual machine-hours

answer: C Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

8) The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job.

answer: FALSE Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

15) The fact that one department may be labor intensive while another department is machine intensive explains in part why multiple predetermined overhead rates are often used in larger companies.

answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

22) Most countries require some form of absorption costing for external reports.

answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

2) Job-order costing systems often use allocation bases that do not reflect how jobs actually use overhead resources.

answer: TRUE Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

290) Levi Corporation uses a predetermined overhead rate of $23.40 per direct labor-hour. This predetermined overhead rate was based on estimated total fixed manufacturing overhead of $702,000 and 30,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $738,000 and 27,100 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

answer: Predetermined overhead rate (a) $23.40 per direct labor-hour Actual activity level (b) 27,100 direct labor-hours Manufacturing overhead applied (a) × (b) $634,140 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

289) Sullen Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Predetermined overhead rate $14.30 per machine-hour Estimated total fixed manufacturing overhead from the beginning of the year $572,000 Estimated activity level from the beginning of the year 40,000 machine-hours Actual total fixed manufacturing overhead $605,000 Actual activity level 36,700 machine-hours Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

answer: Predetermined overhead rate (a) $14.30 per machine-hour Actual activity level (b) 36,700 machine-hours Manufacturing overhead applied (a) × (b) $524,810 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

292) Job 652 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 59,400 Direct labor-hours 1,224 DLHs Direct labor wage rate $ 15 per DLH Number of units completed 3,600 units The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $35 per direct labor-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

answer: Cost Summary Direct materials $ 59,400 Direct labor ($15 per DLH × 1,224 DLHs) 18,360 Manufacturing overhead ($35 per DLH × 1,224 DLHs) 42,840 Total product cost $ 120,600 Unit product cost $ 33.50 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

291) Job 243 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 48,870 Direct labor-hours 405 labor-hours Direct labor wage rate $ 13 per labor-hour Machine-hours 486 machine-hours Number of units completed 2,700 units The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $11 per machine-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.

answer: Cost Summary Direct materials $ 48,870 Direct labor ($13 per DLH × 405 DLHs) 5,265 Manufacturing overhead ($11 per MH × 486 MHs) 5,346 Total product cost $ 59,481 Unit product cost $ 22.03 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

250) Trevigne Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $114,000 Estimated activity level from the beginning of the year 10,000 machine-hours Actual total fixed manufacturing overhead $104,000 Actual activity level 9,400 machine-hours Required: Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

answer: Estimated total fixed manufacturing overhead (a) $114,000 Estimated activity level (b) 10,000 machine-hours Predetermined overhead rate (a) ÷ (b) $11.40 per machine-hour Actual activity level 9,400 machine-hours Manufacturing overhead applied $107,160 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

273) Amason Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $102,400 $66,000 Variable manufacturing overhead per machine-hour $1.90 Variable manufacturing overhead per direct labor-hour $3.80 During the current month the company started and finished Job A950. The following data were recorded for this job: Job A950: Forming Assembly Machine-hours 50 20 Direct labor-hours 20 40 Direct materials $665 $415 Direct labor cost $520 $1,040 Required: Calculate the selling price for Job A950 if the company marks up its unit product costs by 30% to determine selling prices.

answer: Forming Department: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,400 + ($1.90 per machine-hour × 16,000 machine-hours) = $102,400 +$30,400 = $132,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $132,800 ÷ 16,000 machine-hours = $8.30 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.30 per machine-hour × 50 machine-hours = $415 Assembly Department: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $66,000 + ($3.80 per direct labor-hour × 6,000 direct labor-hours) = $66,000 + $22,800 = $88,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $88,800 ÷6,000 direct labor-hours = $14.80 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.80 per direct labor-hour × 40 direct labor-hours = $592 Overhead applied to Job A950 Forming Department $415 Assembly Department 592 Total $1,007 Forming Assembly Total Direct materials $665 $415 $1,080 Direct labor $520 $1,040 1,560 Manufacturing overhead applied $415 $592 1,007 Total cost of Job A950 $3,647 Total cost of Job A950 $3,647.00 Markup ($3,647.00 × 30%) 1,094.10 Selling price $4,741.10 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

275) Pangle Corporation has two production departments, Forming and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Customizing Machine-hours 16,000 12,000 Direct labor-hours 4,000 9,000 Total fixed manufacturing overhead cost $91,200 $99,000 Variable manufacturing overhead per machine-hour $2.10 Variable manufacturing overhead per direct labor-hour $3.10 During the current month the company started and finished Job M109. The following data were recorded for this job: Job M109: Forming Customizing Machine-hours 50 30 Direct labor-hours 20 50 Direct materials $915 $355 Direct labor cost $620 $1,550 Required: Calculate the total job cost for Job M109.

answer: Forming Department: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $91,200 + ($2.10 per machine-hour × 16,000 machine-hours) = $91,200 +$33,600 = $124,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $124,800 ÷ 16,000 machine-hours = $7.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.80 per machine-hour × 50 machine-hours = $390 Customizing Department: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $99,000 + ($3.10 per direct labor-hour × 9,000 direct labor-hours) = $99,000 + $27,900 = $126,900 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $126,900 ÷9,000 direct labor-hours = $14.10 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.10 per direct labor-hour × 50 direct labor-hours = $705 Overhead applied to Job M109 Forming Department $390 Customizing Department 705 Total $1,095 Forming Customizing Total Direct materials $915 $355 $1,270 Direct labor $620 $1,550 2,170 Manufacturing overhead applied $390 $705 1,095 Total cost of Job M109 $4,535 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

282) Bulla Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 19,000 13,000 Direct labor-hours 2,000 9,000 Total fixed manufacturing overhead cost $98,800 $84,600 Variable manufacturing overhead per machine-hour $2.10 Variable manufacturing overhead per direct labor-hour $3.60 During the current month the company started and finished Job K369. The following data were recorded for this job: Job K369: Machining Customizing Machine-hours 90 10 Direct labor-hours 20 50 Required: Calculate the total amount of overhead applied to Job K369 in both departments.

answer: Machining Department: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $98,800 + ($2.10 per machine-hour × 19,000 machine-hours) = $98,800 +$39,900 = $138,700 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $138,700 ÷ 19,000 machine-hours = $7.30 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.30 per machine-hour × 90 machine-hours = $657 Customizing Department: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $84,600 + ($3.60 per direct labor-hour × 9,000 direct labor-hours) = $84,600 + $32,400 = $117,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $117,000 ÷9,000 direct labor-hours = $13.00 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.00 per direct labor-hour × 50 direct labor-hours = $650 Overhead applied to Job K369 Machining Department $657 Customizing Department 650 Total $1,307 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

272) Kluth Corporation has two manufacturing departments—Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Customizing Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $15,900 $4,200 $20,100 Estimated variable manufacturing overhead cost per MH $1.20 $2.40 During the most recent month, the company started and completed two jobs—Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job C Job M Direct materials $15,600 $8,600 Direct labor cost $25,100 $8,300 Molding machine-hours 2,000 1,000 Customizing machine-hours 800 1,200 Required: Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M.

answer: Molding Department predetermined overhead rate: Estimated fixed manufacturing overhead $15,900 Estimated variable manufacturing overhead ($1.20 per MH × 3,000 MHs) 3,600 Estimated total manufacturing overhead cost (a) $19,500 Estimated total machine-hours (b) 3,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $6.50 per MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $4,200 Estimated variable manufacturing overhead ($2.40 per MH × 2,000 MHs) 4,800 Estimated total manufacturing overhead cost (a) $9,000 Estimated total machine-hours (b) 2,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $4.50 per MH Manufacturing overhead applied to Job C: Molding ($6.50 per MH × 2,000 MHs) $13,000 Customizing ($4.50 per MH × 800 MHs) 3,600 Total manufacturing overhead applied $16,600 Manufacturing overhead applied to Job M: Molding ($6.50 per MH × 1,000 MHs) $6,500 Customizing ($4.50 per MH × 1,200 MHs) 5,400 Total manufacturing overhead applied $11,900 The selling price for Job C would be calculated as follows: Direct materials $15,600 Direct labor cost 25,100 Manufacturing overhead applied 16,600 Total manufacturing cost $57,300 Markup (20%) 11,460 Selling price $68,760 The selling price for Job M would be calculated as follows: Direct materials $8,600 Direct labor cost 8,300 Manufacturing overhead applied 11,900 Total manufacturing cost $28,800 Markup (20%) 5,760 Selling price $34,560 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

251) Luarca Corporation has two manufacturing departments—Casting and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Customizing Total Estimated total machine-hours (MHs) 2,000 3,000 5,000 Estimated total fixed manufacturing overhead cost $11,600 $7,200 $18,800 Estimated variable manufacturing overhead cost per MH $1.90 $2.80 During the most recent month, the company started and completed two jobs—Job F and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job F Job L Direct materials $10,600 $6,600 Direct labor cost $24,400 $8,600 Casting machine-hours 1,400 600 Customizing machine-hours 1,200 1,800 Required: Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. Calculate the selling prices for Job F and Job L.

answer: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $11,600 Estimated variable manufacturing overhead ($1.90 per MH × 2,000 MHs) 3,800 Estimated total manufacturing overhead cost $15,400 Customizing Estimated fixed manufacturing overhead $7,200 Estimated variable manufacturing overhead ($2.80 per MH × 3,000 MHs) 8,400 Estimated total manufacturing overhead cost $15,600 The second step is to combine the estimated manufacturing overhead costs in the two departments ($15,400 + $15,600 = $31,000) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $31,000 Estimated total machine hours 5,000 MHs Predetermined overhead rate $6.20 per MH The overhead applied to Job F is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.20 per MH × (1,400 MHs + 1,200 MHs) = $6.20 per MH × (2,600 MHs) = $16,120 The overhead applied to Job L is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.20 per MH × (600 MHs + 1,800 MHs) = $6.20 per MH × (2,400 MHs) = $14,880 Job F's manufacturing cost: Direct materials $10,600 Direct labor cost 24,400 Manufacturing overhead applied 16,120 Total manufacturing cost $51,120 Job L's manufacturing cost: Direct materials $6,600 Direct labor cost 8,600 Manufacturing overhead applied 14,880 Total manufacturing cos $30,080 The selling price for Job F: Total manufacturing cost $51,120 Markup (50%) 25,560 Selling price $76,680 The selling price for Job L: Total manufacturing cost $30,080 Markup (50%) 15,040 Selling price $45,120 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

284) Gercak Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 16,000 11,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $100,800 $76,300 Variable manufacturing overhead per machine-hour $1.70 Variable manufacturing overhead per direct labor-hour $3.10 During the current month the company started and finished Job X560. The following data were recorded for this job: Job X560: Forming Assembly Machine-hours 50 30 Direct labor-hours 30 40 Required: a. Calculate the estimated total manufacturing overhead for the Assembly Department. b. Calculate the predetermined overhead rate for the Forming Department. c. Calculate the total amount of overhead applied to Job X560 in both departments.

answer: a. Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $76,300 + ($3.10 per direct labor-hour × 7,000 direct labor-hours) = $76,300 + $21,700 = $98,000 b. Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $100,800 + ($1.70 per machine-hour × 16,000 machine-hours) = $100,800 +$27,200 = $128,000 Forming Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $128,000 ÷ 16,000 machine-hours = $8.00 per machine-hour c. Forming Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.00 per machine-hour × 50 machine-hours = $400 Assembly Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $98,000 ÷7,000 direct labor-hours = $14.00 per direct labor-hour Assembly Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.00 per direct labor-hour × 40 direct labor-hours = $560 Overhead applied to Job X560 Forming Department $400 Assembly Department 560 Total $960 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

279) Braegelmann Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Assembly Machine-hours 20,000 14,000 Direct labor-hours 4,000 6,000 Total fixed manufacturing overhead cost $110,000 $65,400 Variable manufacturing overhead per machine-hour $1.60 Variable manufacturing overhead per direct labor-hour $4.50 During the current month the company started and finished Job K246. The following data were recorded for this job: Job K246: Casting Assembly Machine-hours 60 30 Direct labor-hours 20 40 Direct materials $950 $305 Direct labor cost $460 $920 Required: a. Calculate the estimated total manufacturing overhead for the Casting Department. b. Calculate the estimated total manufacturing overhead for the Assembly Department. c. Calculate the predetermined overhead rate for the Casting Department. d. Calculate the predetermined overhead rate for the Assembly Department. e. Calculate the amount of overhead applied in the Casting Department to Job K246. f. Calculate the amount of overhead applied in the Assembly Department to Job K246. g. Calculate the total job cost for Job K246. h. Calculate the selling price for Job K246 if the company marks up its unit product costs by 40% to determine selling prices.

answer: a. Casting Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $110,000 + ($1.60 per machine-hour × 20,000 machine-hours) = $110,000 +$32,000 = $142,000 b. Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $65,400 + ($4.50 per direct labor-hour × 6,000 direct labor-hours) = $65,400 + $27,000 = $92,400 c. Casting Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $142,000 ÷ 20,000 machine-hours = $7.10 per machine-hour d. Assembly Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $92,400 ÷6,000 direct labor-hours = $15.40 per direct labor-hour e. Casting Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.10 per machine-hour × 60 machine-hours = $426 f. Assembly Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $15.40 per direct labor-hour × 40 direct labor-hours = $616 g. Casting Assembly Total Direct materials $950 $305 $1,255 Direct labor $460 $920 1,380 Manufacturing overhead applied $426 $616 1,042 Total cost of Job K246 $3,677 h. Total cost of Job K246 $3,677.00 Markup ($3,677.00 × 40%) 1,470.80 Selling price $5,147.80 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

276) Vasilopoulos Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Assembly Machine-hours 17,000 11,000 Direct labor-hours 3,000 6,000 Total fixed manufacturing overhead cost $119,000 $51,000 Variable manufacturing overhead per machine-hour $2.10 Variable manufacturing overhead per direct labor-hour $3.10 During the current month the company started and finished Job A182. The following data were recorded for this job: Job A182: Casting Assembly Machine-hours 50 20 Direct labor-hours 10 50 Direct materials $895 $365 Direct labor cost $240 $1,200 Required: a. Calculate the estimated total manufacturing overhead for the Casting Department. b. Calculate the estimated total manufacturing overhead for the Assembly Department. c. Calculate the predetermined overhead rate for the Casting Department. d. Calculate the predetermined overhead rate for the Assembly Department. e. Calculate the total amount of overhead applied to Job A182 in both departments. f. Calculate the total job cost for Job A182. g. Calculate the selling price for Job A182 if the company marks up its unit product costs by 20% to determine selling prices.

answer: a. Casting Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $119,000 + ($2.10 per machine-hour × 17,000 machine-hours) = $119,000 +$35,700 = $154,700 b. Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $51,000 + ($3.10 per direct labor-hour × 6,000 direct labor-hours) = $51,000 + $18,600 = $69,600 c. Casting Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $154,700 ÷ 17,000 machine-hours = $9.10 per machine-hour d. Assembly Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $69,600 ÷6,000 direct labor-hours = $11.60 per direct labor-hour e. Casting Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.10 per machine-hour × 50 machine-hours = $455 Assembly Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.60 per direct labor-hour × 50 direct labor-hours = $580 Overhead applied to Job A182 Casting Department $455 Assembly Department 580 Total $1,035 f. Casting Assembly Total Direct materials $895 $365 $1,260 Direct labor $240 $1,200 1,440 Manufacturing overhead applied $455 $580 1,035 Total cost of Job A182 $3,735 g. Total cost of Job A182 $3,735.00 Markup ($3,735.00 × 20%) 747.00 Selling price $4,482.00 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

286) Rocher Corporation has two production departments, Casting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Finishing Machine-hours 17,000 13,000 Direct labor-hours 4,000 6,000 Total fixed manufacturing overhead cost $124,100 $52,200 Variable manufacturing overhead per machine-hour $2.30 Variable manufacturing overhead per direct labor-hour $4.00 During the current month the company started and finished Job A394. The following data were recorded for this job: Job A394: Casting Finishing Machine-hours 80 20 Direct labor-hours 10 40 Required: a. Calculate the estimated total manufacturing overhead for the Casting Department. b. Calculate the predetermined overhead rate for the Casting Department. c. Calculate the amount of overhead applied in the Casting Department to Job A394.

answer: a. Casting Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $124,100 + ($2.30 per machine-hour × 17,000 machine-hours) = $124,100 +$39,100 = $163,200 b. Casting Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $163,200 ÷ 17,000 machine-hours = $9.60 per machine-hour c. Casting Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.60 per machine-hour × 80 machine-hours = $768 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

263) Posson Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 20,000 machine-hours, total fixed manufacturing overhead cost of $130,000, and a variable manufacturing overhead rate of $3.00 per machine-hour. Job K789, which was for 10 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours 30 Direct materials $775 Direct labor cost $1,170 Required: a. Calculate the predetermined overhead rate for the year. b. Calculate the amount of overhead applied to Job K789. c. Calculate the total job cost for Job K789. d. Calculate the unit product cost for Job K789.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $130,000 + ($3.00 per machine-hour × 20,000 machine-hours) = $130,000 + $60,000 = $190,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $190,000 ÷ 20,000 machine-hours = $9.50 per machine-hour b. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.50 per machine-hour × 30 machine-hours = $285 c. Direct materials $775 Direct labor 1,170 Manufacturing overhead applied 285 Total cost of Job K789 $2,230 d. Total cost of Job K789 (a) $2,230 Number of units (b) 10 Unit product cost (a) ÷ (b) $223.00 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

257) Lezo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 40,000 machine-hours, total fixed manufacturing overhead cost of $136,000, and a variable manufacturing overhead rate of $2.90 per machine-hour. Job A290, which was for 60 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours 300 Direct materials $585 Direct labor cost $7,200 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job A290. d. Calculate the total job cost for Job A290.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $136,000 + ($2.90 per machine-hour × 40,000 machine-hours) = $136,000 + $116,000 = $252,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $252,000 ÷ 40,000 machine-hours = $6.30 per machine-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.30 per machine-hour × 300 machine-hours = $1,890 d. Direct materials $585 Direct labor 7,200 Manufacturing overhead applied 1,890 Total cost of Job A290 $9,675 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

255) Alsobrooks Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 40,000 Total fixed manufacturing overhead cost $156,000 Variable manufacturing overhead per machine-hour $2.20 Recently Job M242 was completed with the following characteristics: Number of units in the job 20 Total machine-hours 60 Direct materials $725 Direct labor cost $1,680 Required: a. Calculate the total job cost for Job M242. b. Calculate the unit product cost for Job M242.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $156,000 + ($2.20 per machine-hour × 40,000 machine-hours) = $156,000 + $88,000 = $244,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $244,000 ÷ 40,000 machine-hours = $6.10 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.10 per machine-hour × 60 machine-hours = $366 Direct materials $725 Direct labor 1,680 Manufacturing overhead applied 366 Total cost of Job M242 $2,771 b. Total cost of Job M242 (a) $2,771 Number of units (b) 20 Unit product cost (a) ÷ (b) $138.55 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

267) Leeds Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 50,000 Total fixed manufacturing overhead cost $215,000 Variable manufacturing overhead per machine-hour $3.80 Recently Job T496 was completed with the following characteristics: Number of units in the job 80 Total machine-hours 240 Direct materials $735 Direct labor cost $8,880 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job T496. d. Calculate the total job cost for Job T496. e. Calculate the unit product cost for Job T496.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $215,000 + ($3.80 per machine-hour × 50,000 machine-hours) = $215,000 + $190,000 = $405,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $405,000 ÷ 50,000 machine-hours = $8.10 per machine-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.10 per machine-hour × 240 machine-hours = $1,944 d. Direct materials $735 Direct labor 8,880 Manufacturing overhead applied 1,944 Total cost of Job T496 $11,559 e. Total cost of Job T496 (a) $11,559 Number of units (b) 80 Unit product cost (a) ÷ (b) $144.49 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

264) Rondo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.90 Recently Job T506 was completed with the following characteristics: Number of units in the job 70 Total machine-hours 210 Direct materials $665 Direct labor cost $6,720 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job T506. d. Calculate the total job cost for Job T506. e. Calculate the unit product cost for Job T506. f. Calculate the selling price for Job T506 if the company marks up its unit product costs by 20%.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $252,000 + ($2.90 per machine-hour × 30,000 machine-hours) = $252,000 + $87,000 = $339,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $339,000 ÷ 30,000 machine-hours = $11.30 per machine-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.30 per machine-hour × 210 machine-hours = $2,373 d. Direct materials $665 Direct labor 6,720 Manufacturing overhead applied 2,373 Total cost of Job T506 $9,758 e. Total cost of Job T506 (a) $9,758 Number of units (b) 70 Unit product cost (a) ÷ (b) $139.40 f. Unit product cost for Job T506 $139.40 Markup (20% × $139.40) 27.88 Selling price $167.28 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

236) Dallman Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 70,000 machine-hours, total fixed manufacturing overhead cost of $287,000, and a variable manufacturing overhead rate of $3.50 per machine-hour. Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $287,000 + ($3.50 per machine-hour × 70,000 machine-hours) = $287,000 + $245,000 = $532,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $532,000 ÷ 70,000 machine-hours = $7.60 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

261) Cardosa Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 70,000 machine-hours, total fixed manufacturing overhead cost of $308,000, and a variable manufacturing overhead rate of $2.10 per machine-hour. Job M556, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours 100 Direct materials $555 Direct labor cost $2,700 Required: a. Calculate the total job cost for Job M556. b. Calculate the unit product cost for Job M556.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $308,000 + ($2.10 per machine-hour × 70,000 machine-hours) = $308,000 + $147,000 = $455,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $455,000 ÷ 70,000 machine-hours = $6.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per machine-hour × 100 machine-hours = $650 Direct materials $555 Direct labor 2,700 Manufacturing overhead applied 650 Total cost of Job M556 $3,905 b. Total cost of Job M556 (a) $3,905 Number of units (b) 50 Unit product cost (a) ÷ (b) $78.10 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

244) Florek Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 10,000 Total fixed manufacturing overhead cost $31,000 Variable manufacturing overhead per direct labor-hour $2.50 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $31,000 + ($2.50 per direct labor-hour × 10,000 direct labor-hours) = $31,000 + $25,000 = $56,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $56,000 ÷ 10,000 direct labor-hours = $5.60 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

249) Verry Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 60,000 Total fixed manufacturing overhead cost $342,000 Variable manufacturing overhead per direct labor-hour $2.40 Recently Job X711 was completed and required 90 direct labor-hours. Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job X711.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $342,000 + ($2.40 per direct labor-hour × 60,000 direct labor-hours) = $342,000 + $144,000 = $486,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $486,000 ÷ 60,000 direct labor-hours = $8.10 per direct labor-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.10 per direct labor-hour × 90 direct labor-hours = $729 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

252) Lamberson Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 50,000 Total fixed manufacturing overhead cost $460,000 Variable manufacturing overhead per machine-hour $3.10 Recently Job P647 was completed with the following characteristics: Number of units in the job 50 Total machine-hours 150 Direct materials $740 Direct labor cost $6,000 Required: a. Calculate the amount of overhead applied to Job P647. b. Calculate the total job cost for Job P647. c. Calculate the unit product cost for Job P647.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $460,000 + ($3.10 per machine-hour × 50,000 machine-hours) = $460,000 + $155,000 = $615,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $615,000 ÷ 50,000 machine-hours = $12.30 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.30 per machine-hour × 150 machine-hours = $1,845 b. Direct materials $740 Direct labor 6,000 Manufacturing overhead applied 1,845 Total cost of Job P647 $8,585 c. Total cost of Job P647 (a) $8,585 Number of units (b) 50 Unit product cost (a) ÷ (b) $171.70 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

256) Ryans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 10,000 Total fixed manufacturing overhead cost $71,000 Variable manufacturing overhead per machine-hour $2.50 Recently Job P512 was completed with the following characteristics: Number of units in the job 30 Total machine-hours 60 Direct materials $870 Direct labor cost $2,400 Required: a. Calculate the predetermined overhead rate for the year. b. Calculate the amount of overhead applied to Job P512. c. Calculate the total job cost for Job P512. d. Calculate the unit product cost for Job P512.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $71,000 + ($2.50 per machine-hour × 10,000 machine-hours) = $71,000 + $25,000 = $96,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $96,000 ÷ 10,000 machine-hours = $9.60 per machine-hour b. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.60 per machine-hour × 60 machine-hours = $576 c. Direct materials $870 Direct labor 2,400 Manufacturing overhead applied 576 Total cost of Job P512 $3,846 d. Total cost of Job P512 (a) $3,846 Number of units (b) 30 Unit product cost (a) ÷ (b) $128.20 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

265) Leadley Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 10,000 Total fixed manufacturing overhead cost $76,000 Variable manufacturing overhead per direct labor-hour $2.10 Recently Job X701 was completed with the following characteristics: Number of units in the job 90 Total direct labor-hours 270 Direct materials $590 Direct labor cost $6,480 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job X701. d. Calculate the total job cost for Job X701.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $76,000 + ($2.10 per direct labor-hour × 10,000 direct labor-hours) = $76,000 + $21,000 = $97,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $97,000 ÷ 10,000 direct labor-hours = $9.70 per direct labor-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.70 per direct labor-hour × 270 direct labor-hours = $2,619 d. Direct materials $590 Direct labor 6,480 Manufacturing overhead applied 2,619 Total cost of Job X701 $9,689 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

270) Temby Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 10,000 machine-hours, total fixed manufacturing overhead cost of $88,000, and a variable manufacturing overhead rate of $3.20 per machine-hour. Job K418, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours 150 Direct materials $580 Direct labor cost $3,900 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job K418. d. Calculate the total job cost for Job K418. e. Calculate the unit product cost for Job K418. f. Calculate the selling price for Job K418 if the company marks up its unit product costs by 30%.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $88,000 + ($3.20 per machine-hour × 10,000 machine-hours) = $88,000 + $32,000 = $120,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $120,000 ÷ 10,000 machine-hours = $12.00 per machine-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.00 per machine-hour × 150 machine-hours = $1,800 d. Direct materials $580 Direct labor 3,900 Manufacturing overhead applied 1,800 Total cost of Job K418 $6,280 e. Total cost of Job K418 (a) $6,280 Number of units (b) 50 Unit product cost (a) ÷ (b) $125.60 f. Unit product cost for Job K418 $125.60 Markup (30% × $125.60) 37.68 Selling price $163.28 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

271) Saxon Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 10,000 machine-hours, total fixed manufacturing overhead cost of $91,000, and a variable manufacturing overhead rate of $2.40 per machine-hour. Job K373, which was for 60 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total machine-hours 120 Direct materials $645 Direct labor cost $3,720 Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job K373. d. Calculate the total job cost for Job K373. e. Calculate the unit product cost for Job K373.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $91,000 + ($2.40 per machine-hour × 10,000 machine-hours) = $91,000 + $24,000 = $115,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $115,000 ÷ 10,000 machine-hours = $11.50 per machine-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.50 per machine-hour × 120 machine-hours = $1,380 d. Direct materials $645 Direct labor 3,720 Manufacturing overhead applied 1,380 Total cost of Job K373 $5,745 e. Total cost of Job K373 (a) $5,745 Number of units (b) 60 Unit product cost (a) ÷ (b) $95.75 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

44) Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A) $464,120 B) $492,000 C) $487,703 D) $25,000

answer: A Explanation: Estimated total fixed manufacturing overhead (a) $ 492,000 Estimated activity level (b) 30,000 Predetermined overhead rate (a) ÷ (b) $ 16.40 Actual activity level 28,300 Manufacturing overhead applied $ 464,120 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

247) Fillmore Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 60,000 direct labor-hours, total fixed manufacturing overhead cost of $96,000, and a variable manufacturing overhead rate of $3.30 per direct labor-hour. Recently Job X809 was completed and required 100 direct labor-hours. Required: a. Calculate the estimated total manufacturing overhead for the year. b. Calculate the predetermined overhead rate for the year. c. Calculate the amount of overhead applied to Job X809.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.30 per direct labor-hour × 60,000 direct labor-hours) = $96,000 + $198,000 = $294,000 b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $294,000 ÷ 60,000 direct labor-hours = $4.90 per direct labor-hour c. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.90 per direct labor-hour × 100 direct labor-hours = $490 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

259) Obermeyer Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 10,000 direct labor-hours, total fixed manufacturing overhead cost of $96,000, and a variable manufacturing overhead rate of $3.60 per direct labor-hour. Job A735, which was for 40 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total direct labor-hours 200 Direct materials $540 Direct labor cost $6,400 Required: a. Calculate the amount of overhead applied to Job A735. b. Calculate the total job cost for Job A735. c. Calculate the unit product cost for Job A735.

answer: a. Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.60 per direct labor-hour × 10,000 direct labor-hours) = $96,000 + $36,000 = $132,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $132,000 ÷ 10,000 direct labor-hours = $13.20 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.20 per direct labor-hour × 200 direct labor-hours = $2,640 b. Direct materials $540 Direct labor 6,400 Manufacturing overhead applied 2,640 Total cost of Job A735 $9,580 c. Total cost of Job A735 (a) $9,580 Number of units (b) 40 Unit product cost (a) ÷ (b) $239.50 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

287) Marius Corporation has two production departments, Casting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Finishing Machine-hours 18,000 12,000 Direct labor-hours 4,000 6,000 Total fixed manufacturing overhead cost $118,800 $57,600 Variable manufacturing overhead per machine-hour $2.20 Variable manufacturing overhead per direct labor-hour $4.00 During the current month the company started and finished Job K895. The following data were recorded for this job: Job K895: Casting Finishing Machine-hours 70 30 Direct labor-hours 20 60 Required: a. Calculate the estimated total manufacturing overhead for the Finishing Department. b. Calculate the predetermined overhead rate for the Finishing Department. c. Calculate the amount of overhead applied in the Finishing Department to Job K895.

answer: a. Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $57,600 + ($4.00 per direct labor-hour × 6,000 direct labor-hours) = $57,600 + $24,000 = $81,600 b. Finishing Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $81,600 ÷6,000 direct labor-hours = $13.60 per direct labor-hour c. Finishing Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.60 per direct labor-hour × 60 direct labor-hours = $816 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

288) Madole Corporation has two production departments, Forming and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Customizing Machine-hours 19,000 12,000 Direct labor-hours 4,000 8,000 Total fixed manufacturing overhead cost $119,700 $67,200 Variable manufacturing overhead per machine-hour $2.00 Variable manufacturing overhead per direct labor-hour $4.20 During the current month the company started and finished Job K973. The following data were recorded for this job: Job K973: Forming Customizing Machine-hours 50 20 Direct labor-hours 20 50 Required: a. Calculate the estimated total manufacturing overhead for the Forming Department. b. Calculate the predetermined overhead rate for the Customizing Department. c. Calculate the total overhead applied to Job K973 in both departments.

answer: a. Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $119,700 + ($2.00 per machine-hour × 19,000 machine-hours) = $119,700 +$38,000 = $157,700 b. Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $67,200 + ($4.20 per direct labor-hour × 8,000 direct labor-hours) = $67,200 + $33,600 = $100,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $100,800 ÷8,000 direct labor-hours = $12.60 per direct labor-hour c. Forming Department: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $157,700 ÷ 19,000 machine-hours = $8.30 per machine-hour Forming Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.30 per machine-hour × 50 machine-hours = $415 Customizing Department: Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.60 per direct labor-hour × 50 direct labor-hours = $630 Overhead applied to Job K973 Forming Department $415 Customizing Department 630 Total $1,045 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

278) Carcana Corporation has two manufacturing departments—Machining and Finishing. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Machining Finishing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $4,200 $8,800 $13,000 Estimated variable manufacturing overhead cost per MH $1.90 $2.90 During the period, the company started and completed two jobs—Job E and Job G. Data concerning those two jobs follow: Job E Job G Direct materials $11,800 $8,000 Direct labor cost $19,200 $6,700 Machining machine-hours 700 300 Finishing machine-hours 1,600 2,400 Required: a. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Machining department? b. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Finishing department? c. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job E? d. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job G? e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job G. g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. If both jobs were sold during the month, what was the company's cost of goods sold for the month?

answer: a. Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $4,200 Estimated variable manufacturing overhead ($1.90 per MH × 1,000 MHs) 1,900 Estimated total manufacturing overhead cost (a) $6,100 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $6.10 per MH b. Finishing Department predetermined overhead rate: Estimated fixed manufacturing overhead $8,800 Estimated variable manufacturing overhead ($2.90 per MH × 4,000 MHs) 11,600 Estimated total manufacturing overhead cost (a) $20,400 Estimated total machine-hours (b) 4,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $5.10 per MH c. Manufacturing overhead applied to Job E: Machining ($6.10 per MH × 700 MHs) $4,270 Finishing ($5.10 per MH × 1,600 MHs) 8,160 Total manufacturing overhead applied $12,430 d. Manufacturing overhead applied to Job G: Machining ($6.10 per MH × 300 MHs) $1,830 Finishing ($5.10 per MH × 2,400 MHs) 12,240 Total manufacturing overhead applied $14,070 e. The selling price for Job E would be calculated as follows: Direct materials $11,800 Direct labor cost 19,200 Manufacturing overhead applied 12,430 Total manufacturing cost $43,430 Markup (80%) 34,744 Selling price $78,174 f. The selling price for Job G would be calculated as follows: Direct materials $8,000 Direct labor cost 6,700 Manufacturing overhead applied 14,070 Total manufacturing cost $28,770 Markup (80%) 23,016 Selling price $51,786 g. Total manufacturing cost Job E $43,430 Total manufacturing cost Job G 28,770 Cost of goods sold $72,200 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

274) Dancel Corporation has two production departments, Milling and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Finishing Machine-hours 17,000 14,000 Direct labor-hours 1,000 6,000 Total fixed manufacturing overhead cost $91,800 $64,200 Variable manufacturing overhead per machine-hour $2.00 Variable manufacturing overhead per direct labor-hour $3.40 During the current month the company started and finished Job M565. The following data were recorded for this job: Job M565: Milling Finishing Machine-hours 70 20 Direct labor-hours 10 40 Direct materials $750 $360 Direct labor cost $340 $1,360 Required: a. Calculate the total amount of overhead applied to Job M565 in both departments. b. Calculate the total job cost for Job M565. c. Calculate the selling price for Job M565 if the company marks up its unit product costs by 20% to determine selling prices.

answer: a. Milling Department: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $91,800 + ($2.00 per machine-hour × 17,000 machine-hours) = $91,800 +$34,000 = $125,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $125,800 ÷ 17,000 machine-hours = $7.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.40 per machine-hour × 70 machine-hours = $518 Finishing Department: Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $64,200 + ($3.40 per direct labor-hour × 6,000 direct labor-hours) = $64,200 + $20,400 = $84,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $84,600 ÷6,000 direct labor-hours = $14.10 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.10 per direct labor-hour × 40 direct labor-hours = $564 Overhead applied to Job M565 Milling Department $518 Finishing Department 564 Total $1,082 b. Milling Finishing Total Direct materials $750 $360 $1,110 Direct labor $340 $1,360 1,700 Manufacturing overhead applied $518 $564 1,082 Total cost of Job M565 $3,892 c. Total cost of Job M565 $3,892.00 Markup ($3,892.00 × 20%) 778.40 Selling price $4,670.40 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

262) Dietzen Corporation has two manufacturing departments—Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 4,000 6,000 10,000 Estimated total fixed manufacturing overhead cost $18,000 $18,000 $36,000 Estimated variable manufacturing overhead cost per MH $1.50 $2.30 During the most recent month, the company started and completed two jobs—Job D and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job D Job J Direct materials $14,300 $6,800 Direct labor cost $21,700 $8,800 Casting machine-hours 2,700 1,300 Finishing machine-hours 2,400 3,600 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job D. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job J.

answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $18,000 Estimated variable manufacturing overhead ($1.50 per MH × 4,000 MHs) 6,000 Estimated total manufacturing overhead cost $24,000 Finishing Estimated fixed manufacturing overhead $18,000 Estimated variable manufacturing overhead ($2.30 per MH × 6,000 MHs) 13,800 Estimated total manufacturing overhead cost $31,800 The second step is to combine the estimated manufacturing overhead costs in the two departments ($24,000 + $31,800 = $55,800) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $55,800 Estimated total machine hours 10,000 MHs Predetermined overhead rate $5.58 per MH The overhead applied to Job D is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.58 per MH × (2,700 MHs + 2,400 MHs) = $5.58 per MH × (5,100 MHs) = $28,458 Job D's manufacturing cost: Direct materials $14,300 Direct labor cost 21,700 Manufacturing overhead applied 28,458 Total manufacturing cost $64,458 b. The overhead applied to Job J is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.58 per MH × (1,300 MHs + 3,600 MHs) = $5.58 per MH × (4,900 MHs) = $27,342 Job J's manufacturing cost: Direct materials $6,800 Direct labor cost 8,800 Manufacturing overhead applied 27,342 Total manufacturing cost $42,942 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

280) Matrejek Corporation has two manufacturing departments—Forming and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Customizing Total Estimated total machine-hours (MHs) 8,000 2,000 10,000 Estimated total fixed manufacturing overhead cost $36,800 $4,800 $41,600 Estimated variable manufacturing overhead cost per MH $1.60 $2.90 During the most recent month, the company started and completed two jobs—Job D and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job D Job K Direct materials $15,600 $6,900 Direct labor cost $19,100 $8,700 Forming machine-hours 5,400 2,600 Customizing machine-hours 800 1,200 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. Calculate the selling price for Job D. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. Calculate the selling price for Job K. c. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. Calculate the selling price for Job D. d. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. Calculate the selling price for Job K.

answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $36,800 Estimated variable manufacturing overhead ($1.60 per MH × 8,000 MHs) 12,800 Estimated total manufacturing overhead cost $49,600 Customizing Estimated fixed manufacturing overhead $4,800 Estimated variable manufacturing overhead ($2.90 per MH × 2,000 MHs) 5,800 Estimated total manufacturing overhead cost $10,600 The second step is to combine the estimated manufacturing overhead costs in the two departments ($49,600 + $10,600 = $60,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $60,200 Estimated total machine hours 10,000 MHs Predetermined overhead rate $6.02 per MH The overhead applied to Job D is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.02 per MH × (5,400 MHs + 800 MHs) = $6.02 per MH × (6,200 MHs) = $37,324 The selling price for Job D: Direct materials $15,600 Direct labor cost 19,100 Manufacturing overhead applied 37,324 Total manufacturing cost $72,024 Markup (50%) 36,012 Selling price $108,036 b. The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.02 per MH × (2,600 MHs + 1,200 MHs) = $6.02 per MH × (3,800 MHs) = $22,876 Job K's manufacturing cost: Direct materials $6,900 Direct labor cost 8,700 Manufacturing overhead applied 22,876 Total manufacturing cost $38,476 The selling price for Job K: Total manufacturing cost $38,476 Markup (50%) 19,238 Selling price $57,714 c. Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $36,800 Estimated variable manufacturing overhead ($1.60 per MH × 8,000 MHs) 12,800 Estimated total manufacturing overhead cost (a) $49,600 Estimated total machine-hours (b) 8,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $6.20 per MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $4,800 Estimated variable manufacturing overhead ($2.90 per MH × 2,000 MHs) 5,800 Estimated total manufacturing overhead cost (a) $10,600 Estimated total machine-hours (b) 2,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $5.30 per MH Manufacturing overhead applied to Job D: Forming ($6.20 per MH × 5,400 MHs) $33,480 Customizing ($5.30 per MH × 800 MHs) 4,240 Total manufacturing overhead applied $37,720 The selling price for Job D would be calculated as follows: Direct materials $15,600 Direct labor cost 19,100 Manufacturing overhead applied 37,720 Total manufacturing cost $72,420 Markup (50%) 36,210 Selling price $108,630 d. Manufacturing overhead applied to Job K: Forming ($6.20 per MH × 2,600 MHs) $16,120 Customizing ($5.30 per MH × 1,200 MHs) 6,360 Total manufacturing overhead applied $22,480 The selling price for Job K would be calculated as follows: Direct materials $6,900 Direct labor cost 8,700 Manufacturing overhead applied 22,480 Total manufacturing cost $38,080 Markup (50%) 19,040 Selling price $57,120 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

277) Hultquist Corporation has two manufacturing departments—Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Forming Customizing Total Estimated total machine-hours (MHs) 9,000 1,000 10,000 Estimated total fixed manufacturing overhead cost $50,400 $2,600 $53,000 Estimated variable manufacturing overhead cost per MH $1.70 $2.10 During the period, the company started and completed two jobs—Job C and Job L. Data concerning those two jobs follow: Job C Job L Direct materials $15,100 $6,900 Direct labor cost $20,800 $8,500 Forming machine-hours 6,100 2,900 Customizing machine-hours 400 600 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job L. c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job L. d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job L. e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Forming department? f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Customizing department? g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job L? h. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job L.

answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $50,400 Estimated variable manufacturing overhead ($1.70 per MH × 9,000 MHs) 15,300 Estimated total manufacturing overhead cost $65,700 Customizing Estimated fixed manufacturing overhead $2,600 Estimated variable manufacturing overhead ($2.10 per MH × 1,000 MHs) 2,100 Estimated total manufacturing overhead cost $4,700 The second step is to combine the estimated manufacturing overhead costs in the two departments ($65,700 + $4,700 = $70,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $70,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $7.04 per MH b. The overhead applied to Job L is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $7.04 per MH × (2,900 MHs + 600 MHs) = $7.04 per MH × (3,500 MHs) = $24,640 c. Job L's manufacturing cost: Direct materials $6,900 Direct labor cost 8,500 Manufacturing overhead applied 24,640 Total manufacturing cost $40,040 d. The selling price for Job L: Total manufacturing cost $40,040 Markup (80%) 32,032 Selling price $72,072 e. Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $50,400 Estimated variable manufacturing overhead ($1.70 per MH × 9,000 MHs) 15,300 Estimated total manufacturing overhead cost (a) $65,700 Estimated total machine-hours (b) 9,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $7.30 per MH f. Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $2,600 Estimated variable manufacturing overhead ($2.10 per MH × 1,000 MHs) 2,100 Estimated total manufacturing overhead cost (a) $4,700 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $4.70 per MH g. Manufacturing overhead applied to Job L: Forming ($7.30 per MH × 2,900 MHs) $21,170 Customizing ($4.70 per MH × 600 MHs) 2,820 Total manufacturing overhead applied $23,990 h. The selling price for Job L would be calculated as follows: Direct materials $6,900 Direct labor cost 8,500 Manufacturing overhead applied 23,990 Total manufacturing cost $39,390 Markup (80%) 31,512 Selling price $70,902 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

237) Henkes Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 66,000 labor-hours. The estimated variable manufacturing overhead was $8.41 per labor-hour and the estimated total fixed manufacturing overhead was $1,533,180. The actual labor-hours for the year turned out to be 68,400 labor-hours. Required: Compute the company's predetermined overhead rate for the recently completed year.

answer: Estimated total manufacturing overhead = $1,533,180 + ($8.41 per labor-hour × 66,000 labor-hours) = $2,088,240 Predetermined overhead rate = $2,088,240 ÷ 66,000 labor-hours = $31.64 per labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

283) Bierce Corporation has two manufacturing departments—Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Finishing Total Estimated total machine-hours (MHs) 4,000 1,000 5,000 Estimated total fixed manufacturing overhead cost $20,000 $2,100 $22,100 Estimated variable manufacturing overhead cost per MH $1.40 $2.80 During the most recent month, the company started and completed two jobs—Job B and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job B Job K Direct materials $12,800 $7,900 Direct labor cost $24,700 $6,400 Machining machine-hours 2,700 1,300 Finishing machine-hours 400 600 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job B. c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job K. d. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Machining department? e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Finishing department? f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job B? g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job K?

answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $20,000 Estimated variable manufacturing overhead ($1.40 per MH × 4,000 MHs) 5,600 Estimated total manufacturing overhead cost $25,600 Finishing Estimated fixed manufacturing overhead $2,100 Estimated variable manufacturing overhead ($2.80 per MH × 1,000 MHs) 2,800 Estimated total manufacturing overhead cost $4,900 The second step is to combine the estimated manufacturing overhead costs in the two departments ($25,600 + $4,900 = $30,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $30,500 Estimated total machine hours 5,000 MHs Predetermined overhead rate $6.10 per MH b. The overhead applied to Job B is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.10 per MH × (2,700 MHs + 400 MHs) = $6.10 per MH × (3,100 MHs) = $18,910 c. The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.10 per MH × (1,300 MHs + 600 MHs) = $6.10 per MH × (1,900 MHs) = $11,590 d. Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $20,000 Estimated variable manufacturing overhead ($1.40 per MH × 4,000 MHs) 5,600 Estimated total manufacturing overhead cost (a) $25,600 Estimated total machine-hours (b) 4,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $6.40 per MH e. Finishing Department predetermined overhead rate: Estimated fixed manufacturing overhead $2,100 Estimated variable manufacturing overhead ($2.80 per MH × 1,000 MHs) 2,800 Estimated total manufacturing overhead cost (a) $4,900 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $4.90 per MH f. Manufacturing overhead applied to Job B: Machining ($6.40 per MH × 2,700 MHs) $17,280 Finishing ($4.90 per MH × 400 MHs) 1,960 Total manufacturing overhead applied $19,240 g. Manufacturing overhead applied to Job K: Machining ($6.40 per MH × 1,300 MHs) $8,320 Finishing ($4.90 per MH × 600 MHs) 2,940 Total manufacturing overhead applied $11,260 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

260) Olmscheid Corporation has two manufacturing departments—Molding and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Molding Customizing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $21,000 $14,000 $35,000 Estimated variable manufacturing overhead cost per MH $1.50 $2.40 During the period, the company started and completed two jobs—Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job F Job K Direct materials $12,700 $6,400 Direct labor cost $19,100 $7,900 Molding machine-hours 3,400 1,600 Customizing machine-hours 2,000 3,000 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job F. c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job K. d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job F. e. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job K. f. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 30% on manufacturing cost to establish selling prices. Calculate the selling price for Job F. g. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 30% on manufacturing cost to establish selling prices. Calculate the selling price for Job K. h. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. If both jobs were sold during the month, what was the company's cost of goods sold for the month?

answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $21,000 Estimated variable manufacturing overhead ($1.50 per MH × 5,000 MHs) 7,500 Estimated total manufacturing overhead cost $28,500 Customizing Estimated fixed manufacturing overhead $14,000 Estimated variable manufacturing overhead ($2.40 per MH × 5,000 MHs) 12,000 Estimated total manufacturing overhead cost $26,000 The second step is to combine the estimated manufacturing overhead costs in the two departments ($28,500 + $26,000 = $54,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $54,500 Estimated total machine hours 10,000 MHs Predetermined overhead rate $5.45 per MH b. The overhead applied to Job F is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.45 per MH × (3,400 MHs + 2,000 MHs) = $5.45 per MH × (5,400 MHs) = $29,430 c. The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.45 per MH × (1,600 MHs + 3,000 MHs) = $5.45 per MH × (4,600 MHs) = $25,070 d. Job F's manufacturing cost: Direct materials $12,700 Direct labor cost 19,100 Manufacturing overhead applied 29,430 Total manufacturing cost $61,230 e. Job K's manufacturing cost: Direct materials $6,400 Direct labor cost 7,900 Manufacturing overhead applied 25,070 Total manufacturing cost $39,370 f. The selling price for Job F: Total manufacturing cost $61,230 Markup (30%) 18,369 Selling price $79,599 g. The selling price for Job K: Total manufacturing cost $39,370 Markup (30%) 11,811 Selling price $51,181 h. Total manufacturing cost assigned to Job F $61,230 Total manufacturing cost assigned to Job K 39,370 Cost of goods sold $100,600 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

281) Harnett Corporation has two manufacturing departments—Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Molding Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $29,000 $13,500 $42,500 Estimated variable manufacturing overhead cost per MH $1.20 $2.30 During the period, the company started and completed two jobs—Job E and Job M. Data concerning those two jobs follow: Job E Job M Direct materials $14,300 $9,400 Direct labor cost $22,800 $8,900 Molding machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job E. c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job E. d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 60% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Molding department? f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Assembly department? g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job E? h. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 60% on manufacturing cost to establish selling prices. Calculate the selling price for Job E.

answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $29,000 Estimated variable manufacturing overhead ($1.20 per MH × 5,000 MHs) 6,000 Estimated total manufacturing overhead cost $35,000 Assembly Estimated fixed manufacturing overhead $13,500 Estimated variable manufacturing overhead ($2.30 per MH × 5,000 MHs) 11,500 Estimated total manufacturing overhead cost $25,000 The second step is to combine the estimated manufacturing overhead costs in the two departments ($35,000 + $25,000 = $60,000) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $60,000 Estimated total machine hours 10,000 MHs Predetermined overhead rate $6.00 per MH b. The overhead applied to Job E is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.00 per MH × (3,400 MHs + 2,000 MHs) = $6.00 per MH × (5,400 MHs) = $32,400 c. Job E's manufacturing cost: Direct materials $14,300 Direct labor cost 22,800 Manufacturing overhead applied 32,400 Total manufacturing cost $69,500 d. The selling price for Job E: Total manufacturing cost $69,500 Markup (60%) 41,700 Selling price $111,200 e. Molding Department predetermined overhead rate: Estimated fixed manufacturing overhead $29,000 Estimated variable manufacturing overhead ($1.20 per MH × 5,000 MHs) 6,000 Estimated total manufacturing overhead cost (a) $35,000 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $7.00 per MH f. Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $13,500 Estimated variable manufacturing overhead ($2.30 per MH × 5,000 MHs) 11,500 Estimated total manufacturing overhead cost (a) $25,000 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $5.00 per MH g. Manufacturing overhead applied to Job E: Molding ($7.00 per MH × 3,400 MHs) $23,800 Assembly ($5.00 per MH × 2,000 MHs) 10,000 Total manufacturing overhead applied $33,800 h. The selling price for Job E would be calculated as follows: Direct materials $14,300 Direct labor cost 22,800 Manufacturing overhead applied 33,800 Total manufacturing cost $70,900 Markup (60%) 42,540 Selling price $113,440 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

285) Sonneborn Corporation has two manufacturing departments—Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $5,100 $23,400 $28,500 Estimated variable manufacturing overhead cost per MH $1.50 $2.50 During the most recent month, the company started and completed two jobs—Job D and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job D Job G Direct materials $14,700 $9,100 Direct labor cost $18,800 $8,300 Molding machine-hours 700 300 Customizing machine-hours 3,600 5,400 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job D. b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job G. c. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job D? d. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job G?

answer: a. The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $5,100 Estimated variable manufacturing overhead ($1.50 per MH × 1,000 MHs) 1,500 Estimated total manufacturing overhead cost $6,600 Customizing Estimated fixed manufacturing overhead $23,400 Estimated variable manufacturing overhead ($2.50 per MH × 9,000 MHs) 22,500 Estimated total manufacturing overhead cost $45,900 The second step is to combine the estimated manufacturing overhead costs in the two departments ($6,600 + $45,900 = $52,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $52,500 Estimated total machine hours 10,000 MHs Predetermined overhead rate $5.25 per MH The overhead applied to Job D is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.25 per MH × (700 MHs + 3,600 MHs) = $5.25 per MH × (4,300 MHs) = $22,575 b. The overhead applied to Job G is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.25 per MH × (300 MHs + 5,400 MHs) = $5.25 per MH × (5,700 MHs) = $29,925 c. Molding Department predetermined overhead rate: Estimated fixed manufacturing overhead $5,100 Estimated variable manufacturing overhead ($1.50 per MH × 1,000 MHs) 1,500 Estimated total manufacturing overhead cost (a) $6,600 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $6.60 per MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $23,400 Estimated variable manufacturing overhead ($2.50 per MH × 9,000 MHs) 22,500 Estimated total manufacturing overhead cost (a) $45,900 Estimated total machine-hours (b) 9,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $5.10 per MH Manufacturing overhead applied to Job D: Molding ($6.60 per MH × 700 MHs) $4,620 Customizing ($5.10 per MH × 3,600 MHs) 18,360 Total manufacturing overhead applied $22,980 d. Manufacturing overhead applied to Job G: Molding ($6.60 per MH × 300 MHs) $1,980 Customizing ($5.10 per MH × 5,400 MHs) 27,540 Total manufacturing overhead applied $29,520 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

50) Fusaro Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 684,000 Estimated activity level from the beginning of the year 40,000 machine-hours Actual total fixed manufacturing overhead $ 616,000 Actual activity level 37,700 machine-hours The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A) $644,670 B) $684,000 C) $68,000 D) $580,580

answer: A Explanation: Estimated total fixed manufacturing overhead (a) $ 684,000 Estimated activity level (b) 40,000 Predetermined overhead rate (a) ÷ (b) $ 17.10 Actual activity level 37,700 Manufacturing overhead applied $ 644,670 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

170) Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 19,000 15,000 Direct labor-hours 4,000 8,000 Total fixed manufacturing overhead cost $ 129,200 $ 77,600 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job T288. The following data were recorded for this job: Job T288: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 40 Direct materials $ 730 $ 380 Direct labor cost $ 900 $ 1,200 The amount of overhead applied in the Assembly Department to Job T288 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $508.00 B) $101,600.00 C) $388.00 D) $120.00

answer: A Explanation: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $77,600 + ($3.00 per direct labor-hour × 8,000 direct labor-hours) = $77,600 + $24,000 = $101,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $101,600 ÷ 8,000 direct labor-hours = $12.70 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.70 per direct labor-hour × 40 direct labor-hours = $508 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

61) Placker Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $155,000, variable manufacturing overhead of $3.40 per machine-hour, and 50,000 machine-hours. Recently, Job A881 was completed with the following characteristics: Total machine-hours 100 Direct materials $ 645 Direct labor cost $ 2,300 The total job cost for Job A881 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $3,595 B) $2,945 C) $2,950 D) $1,295

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $155,000 + ($3.40 per machine-hour × 50,000 machine-hours) = $155,000 + $170,000 = $325,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $325,000 ÷ 50,000 machine-hours = $6.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per machine-hour × 100 machine-hours = $650 Direct materials $ 645 Direct labor 2,300 Manufacturing overhead applied 650 Total cost of Job A881 $ 3,595 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

129) Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 50 Direct materials $920 Direct labor cost $1,400 If the company marks up its unit product costs by 40% then the selling price for a unit in Job K818 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $363.30 B) $103.80 C) $383.30 D) $324.80

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $162,000 + ($2.80 per direct labor-hour × 60,000 direct labor-hours) = $162,000 + $168,000 = $330,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $330,000 ÷ 60,000 direct labor-hours = $5.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.50 per direct labor-hour × 50 direct labor-hours = $275 Direct materials $ 920 Direct labor 1,400 Manufacturing overhead applied 275 Total cost of Job K818 $ 2,595 Total cost of Job K818 (a) $2,595 Number of units (b) 10 Unit product cost (a) ÷ (b) $259.50 Unit product cost for Job K818 $ 259.50 Markup (40% × $259.50) 103.80 Selling price $ 363.30 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

123) Decorte Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 10,000 Total fixed manufacturing overhead cost $33,000 Variable manufacturing overhead per direct labor-hour $2.50 Recently, Job K332 was completed with the following characteristics: Number of units in the job 70 Total direct labor-hours 140 Direct materials $455 Direct labor cost $5,320 The unit product cost for Job K332 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $94.10 B) $18.10 C) $82.50 D) $47.05

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $33,000 + ($2.50 per direct labor-hour × 10,000 direct labor-hours) = $33,000 + $25,000 = $58,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $58,000 ÷ 10,000 direct labor-hours = $5.80 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.80 per direct labor-hour × 140 direct labor-hours = $812 Direct materials $ 455 Direct labor 5,320 Manufacturing overhead applied 812 Total cost of Job K332 $ 6,587 Total cost of Job K332 (a) $6,587 Number of units (b) 70 Unit product cost (a) ÷ (b) $94.10 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

80) Kavin Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Predetermined overhead rate $ 23.60 per machine-hour Estimated total fixed manufacturing overhead from the beginning of the year $ 708,000 Estimated activity level from the beginning of the year 30,000 machine-hours Actual total fixed manufacturing overhead $ 752,000 Actual activity level 28,100 machine-hours The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: A) $663,160 B) $708,000 C) $44,000 D) $704,373

answer: A Explanation: Predetermined overhead rate $ 23.60 Actual activity level 28,100 Manufacturing overhead applied $ 663,160 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

62) Tomey Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 18,000 14,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 99,000 $ 70,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.70 During the current month the company started and finished Job T617. The following data were recorded for this job: Job T617: Forming Finishing Machine-hours 90 20 Direct labor-hours 30 60 Direct materials $ 940 $ 350 Direct labor cost $ 960 $ 1,920 The total job cost for Job T617 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $5,604 B) $2,584 C) $684 D) $3,020

answer: A Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $99,000 + ($2.10 per machine-hour × 18,000 machine-hours) = $99,000 + $37,800 = $136,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $136,800 ÷ 18,000 machine-hours = $7.60 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.60 per machine-hour × 90 machine-hours = $684 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $70,400 + ($3.70 per direct labor-hour × 8,000 direct labor-hours) = $70,400 + $29,600 = $100,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $100,000 ÷ 8,000 direct labor-hours = $12.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.50 per direct labor-hour × 60 direct labor-hours = $750 Forming Finishing Total Direct materials $ 940 $ 350 $ 1,290 Direct labor $ 960 $ 1,920 2,880 Manufacturing overhead applied $ 684 $ 750 1,434 Total cost of Job T617 $ 5,604 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

182) Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 12,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 136,800 $ 69,600 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.20 During the current month the company started and finished Job K928. The following data were recorded for this job: Job K928: Machining Finishing Machine-hours 90 10 Direct labor-hours 30 50 Direct materials $ 775 $ 415 Direct labor cost $ 630 $ 1,050 The total amount of overhead applied in both departments to Job K928 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,405 B) $2,000 C) $810 D) $595

answer: A Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $136,800 + ($1.80 per machine-hour × 19,000 machine-hours) = $136,800 + $34,200 = $171,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.00 per machine-hour × 90 machine-hours = $810 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $69,600 + ($3.20 per direct labor-hour × 8,000 direct labor-hours) = $69,600 + $25,600 = $95,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $95,200 ÷ 8,000 direct labor-hours = $11.90 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.90 per direct labor-hour × 50 direct labor-hours = $595 Overhead applied to Job K928 Machining Department $ 810 Finishing Department 595 Total $ 1,405 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

188) Janicki Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 23,400 $ 28,200 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job A Job J Direct materials $ 12,000 $ 7,700 Direct labor cost $ 20,700 $ 6,400 Machining machine-hours 700 300 Customizing machine-hours 3,600 5,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job J is closest to: (Round your intermediate calculations to 2 decimal places.) A) $65,115 B) $67,720 C) $21,705 D) $43,410

answer: A Explanation: Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 4,800 Estimated variable manufacturing overhead ($1.10 per MH × 1,000 MHs) 1,100 Estimated total manufacturing overhead cost (a) $ 5,900 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.90 /MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 23,400 Estimated variable manufacturing overhead ($2.50 per MH × 9,000 MHs) 22,500 Estimated total manufacturing overhead cost (a) $ 45,900 Estimated total machine-hours (b) 9,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.10 /MH Manufacturing overhead applied to Job J: Machining ($5.90 per MH × 300 MHs) $ 1,770 Customizing ($5.10 per MH × 5,400 MHs) 27,540 Total manufacturing overhead applied $ 29,310 The selling price for Job J would be calculated as follows: Direct materials $ 7,700 Direct labor cost 6,400 Manufacturing overhead applied 29,310 Total manufacturing cost $ 43,410 Markup (50%) 21,705 Selling price $ 65,115 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

63) Molash Corporation has two manufacturing departments—Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 2,000 3,000 5,000 Estimated total fixed manufacturing overhead cost $ 9,400 $ 8,100 $ 17,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.40 During the most recent month, the company started and completed two jobs—Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job B Job L Direct materials $ 14,400 $ 7,100 Direct labor cost $ 23,500 $ 6,700 Machining machine-hours 1,400 600 Assembly machine-hours 1,200 1,800 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job L is closest to: (Round your intermediate calculations to 2 decimal places.) A) $40,320 B) $41,933 C) $13,440 D) $26,880

answer: A Explanation: Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 9,400 Estimated variable manufacturing overhead ($1.80 per MH × 2,000 MHs) 3,600 Estimated total manufacturing overhead cost (a) $ 13,000 Estimated total machine-hours (b) 2,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 6.50 /MH Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 8,100 Estimated variable manufacturing overhead ($2.40 per MH × 3,000 MHs) 7,200 Estimated total manufacturing overhead cost (a) $ 15,300 Estimated total machine-hours (b) 3,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.10 /MH Manufacturing overhead applied to Job L: Machining ($6.50 per MH × 600 MHs) $ 3,900 Assembly ($5.10 per MH × 1,800 MHs) 9,180 Total manufacturing overhead applied $ 13,080 The selling price for Job L would be calculated as follows: Direct materials $ 7,100 Direct labor cost 6,700 Manufacturing overhead applied 13,080 Total manufacturing cost $ 26,880 Markup (50%) 13,440 Selling price $ 40,320 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

24) Which of the following is the correct formula to compute the predetermined overhead rate? A) Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs B) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base C) Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base D) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base.

answer: B Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

29) Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials $ 6,000 Direct labor $ 20,000 Rent on factory building $ 15,000 Sales salaries $ 25,000 Depreciation on factory equipment $ 8,000 Indirect labor $ 12,000 Production supervisor's salary $ 15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $2.50 per direct labor-hour B) $2.79 per direct labor-hour C) $3.00 per direct labor-hour D) $4.00 per direct labor-hour

answer: A Explanation: Rent on factory building $ 15,000 Depreciation on factory equipment 8,000 Indirect labor 12,000 Production supervisor's salary 15,000 Manufacturing overhead $ 50,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $50,000 ÷ 20,000 direct labor-hours = $2.50 per direct labor-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

40) Steele Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. Steele Corporation has provided the following estimated costs for next year: Direct materials $ 20,000 Direct labor $ 60,000 Sales commissions $ 80,000 Salary of production supervisor $ 40,000 Indirect materials $ 8,000 Advertising expense $ 16,000 Rent on factory equipment $ 20,000 Steele estimates that 10,000 direct labor-hours and 16,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $4.25 B) $8.00 C) $9.00 D) $10.25

answer: A Explanation: Salary of production supervisor $ 40,000 Indirect materials 8,000 Rent on factory equipment 20,000 Manufacturing overhead $ 68,000 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base Predetermined overhead rate = $68,000 ÷ 16,000 machine-hours = $4.25 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

33) Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000 machine-hours Actual total fixed manufacturing overhead $ 487,000 Actual activity level 27,400 machine-hours The predetermined overhead rate per machine-hour would be closest to: A) $17.80 B) $19.49 C) $16.23 D) $17.77

answer: A Explanation: Estimated total fixed manufacturing overhead (a) $534,000 Estimated activity level (b) 30,000 Predetermined overhead rate (a) ÷ (b $17.80 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

136) Ronson Corporation has two manufacturing departments—Casting and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Customizing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 27,500 $ 10,500 $ 38,000 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.60 During the most recent month, the company started and completed two jobs—Job C and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job C Job G Direct materials $ 10,600 $ 6,800 Direct labor cost $ 23,700 $ 7,900 Casting machine-hours 3,400 1,600 Customizing machine-hours 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job C is closest to: (Round your intermediate calculations to 2 decimal places.) A) $32,130 B) $11,900 C) $20,230 D) $20,520

answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 27,500 Estimated variable manufacturing overhead ($1.70 per MH × 5,000 MHs) 8,500 Estimated total manufacturing overhead cost $ 36,000 Customizing Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.60 per MH × 5,000 MHs) 13,000 Estimated total manufacturing overhead cost $ 23,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($36,000 + $23,500 = $59,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 59,500 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.95 per MH The overhead applied to Job C is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.95 per MH × (3,400 MHs + 2,000 MHs) = $5.95 per MH × (5,400 MHs) = $32,130 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

201) Tiff Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Assembly Machine-hours 17,000 10,000 Direct labor-hours 1,000 5,000 Total fixed manufacturing overhead cost $ 129,200 $ 46,500 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.80 During the current month the company started and finished Job P131. The following data were recorded for this job: Job P131: Casting Assembly Machine-hours 90 20 Direct labor-hours 20 60 The predetermined overhead rate for the Casting Department is closest to: A) $9.40 per machine-hour B) $7.60 per machine-hour C) $1.80 per machine-hour D) $31.96 per machine-hour

answer: A Explanation: Casting Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $129,200 + ($1.80 per machine-hour × 17,000 machine-hours) = $129,200 + $30,600 = $159,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $159,800 ÷ 17,000 machine-hours = $9.40 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

227) Garza Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Customizing Machine-hours 20,000 13,000 Direct labor-hours 1,000 7,000 Total fixed manufacturing overhead cost $ 152,000 $ 68,600 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 4.30 The predetermined overhead rate for the Casting Department is closest to: A) $9.70 per machine-hour B) $7.60 per machine-hour C) $2.10 per machine-hour D) $27.71 per machine-hour

answer: A Explanation: Casting Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $152,000 + ($2.10 per machine-hour × 20,000 machine-hours) = $152,000 + $42,000 = $194,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $194,000 ÷ 20,000 machine-hours = $9.70 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

220) Barbeau Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 17,000 13,000 Direct labor-hours 2,000 5,000 Total fixed manufacturing overhead cost $ 119,000 $ 42,000 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 4.30 During the current month the company started and finished Job A492. The following data were recorded for this job: Job A492: Milling Customizing Machine-hours 90 20 Direct labor-hours 20 50 The estimated total manufacturing overhead for the Customizing Department is closest to: A) $63,500 B) $21,500 C) $42,000 D) $33,853

answer: A Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $42,000 + ($4.30 per direct labor-hour × 5,000 direct labor-hours) = $42,000 + $21,500 = $63,500 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

37) Longobardi Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 46,000 labor-hours. The estimated variable manufacturing overhead was $6.25 per labor-hour and the estimated total fixed manufacturing overhead was $1,026,260. The actual labor-hours for the year turned out to be 41,200 labor-hours. The predetermined overhead rate for the recently completed year was closest to: A) $28.56 per labor-hour B) $22.31 per labor-hour C) $6.25 per labor-hour D) $31.16 per labor-hour

answer: A Explanation: Estimated total manufacturing overhead = $1,026,260 + ($6.25 per labor-hour × 46,000 labor-hours) = $1,313,760 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,313,760 ÷ 46,000 labor-hours = $28.56 per labor-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

35) Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was $7.38 per machine-hour and the estimated total fixed manufacturing overhead was $2,347,090. The predetermined overhead rate for the recently completed year was closest to: A) $37.09 per machine-hour B) $36.07 per machine-hour C) $7.38 per machine-hour D) $29.71 per machine-hour

answer: A Explanation: Estimated total manufacturing overhead = $2,347,090 + ($7.38 per machine-hour × 79,000 machine-hours) = $2,930,110 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $2,930,110 ÷ 79,000 machine-hours = $37.09 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

109) Branin Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $160,000, variable manufacturing overhead of $3.40 per direct labor-hour, and 80,000 direct labor-hours. The company has provided the following data concerning Job A578 which was recently completed: Total direct labor-hours 250 Direct materials $ 715 Direct labor cost $ 9,000 The total job cost for Job A578 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $11,065 B) $10,350 C) $2,065 D) $9,715

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $160,000 + ($3.40 per direct labor-hour × 80,000 direct labor-hours) = $160,000 + $272,000 = $432,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $432,000 ÷ 80,000 direct labor-hours = $5.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.40 per direct labor-hour × 250 direct labor-hours = $1,350 Direct materials $ 715 Direct labor 9,000 Manufacturing overhead applied 1,350 Total cost of Job A578 $ 11,065 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

125) Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 50 Direct materials $920 Direct labor cost $1,400 The predetermined overhead rate is closest to: A) $5.50 per direct labor-hour B) $8.30 per direct labor-hour C) $2.80 per direct labor-hour D) $2.70 per direct labor-hour

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $162,000 + ($2.80 per direct labor-hour × 60,000 direct labor-hours) = $162,000 + $168,000 = $330,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $330,000 ÷ 60,000 direct labor-hours = $5.50 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

124) Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 50 Direct materials $920 Direct labor cost $1,400 The estimated total manufacturing overhead is closest to: A) $330,000 B) $162,000 C) $168,000 D) $162,003

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $162,000 + ($2.80 per direct labor-hour × 60,000 direct labor-hours) = $162,000 + $168,000 = $330,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

110) Spang Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 20,000 Total fixed manufacturing overhead cost $ 176,000 Variable manufacturing overhead per machine-hour $ 2.20 Recently, Job P505 was completed with the following characteristics: Total machine-hours 200 Direct materials $ 540 Direct labor cost $ 7,200 The amount of overhead applied to Job P505 is closest to: A) $2,200 B) $1,760 C) $2,640 D) $440

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $176,000 + ($2.20 per machine-hour × 20,000 machine-hours) = $176,000 + $44,000 = $220,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $220,000 ÷ 20,000 machine-hours = $11.00 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.00 per machine-hour × 200 machine-hours = $2,200 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

132) Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $675 Direct labor cost $1,050 The amount of overhead applied to Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $315 B) $252 C) $378 D) $63

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 30,000 machine-hours = $10.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.50 per machine-hour × 30 machine-hours = $315 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

130) Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $675 Direct labor cost $1,050 The estimated total manufacturing overhead is closest to: A) $315,000 B) $252,000 C) $252,002 D) $63,000

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

162) Prather Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 50,000 Total fixed manufacturing overhead cost $ 285,000 Variable manufacturing overhead per direct labor-hour $ 3.80 Recently, Job P513 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 20 Direct materials $ 710 Direct labor cost $ 500 The estimated total manufacturing overhead is closest to: A) $475,000 B) $285,000 C) $190,000 D) $285,004

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $285,000 + ($3.80 per direct labor-hour × 50,000 direct labor-hours) = $285,000 + $190,000 = $475,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

121) Decorte Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 10,000 Total fixed manufacturing overhead cost $33,000 Variable manufacturing overhead per direct labor-hour $2.50 Recently, Job K332 was completed with the following characteristics: Number of units in the job 70 Total direct labor-hours 140 Direct materials $455 Direct labor cost $5,320 The amount of overhead applied to Job K332 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $812 B) $350 C) $462 D) $1,162

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $33,000 + ($2.50 per direct labor-hour × 10,000 direct labor-hours) = $33,000 + $25,000 = $58,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $58,000 ÷ 10,000 direct labor-hours = $5.80 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.80 per direct labor-hour × 140 direct labor-hours = $812 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

45) Beat Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 40,000 Total fixed manufacturing overhead cost $ 344,000 Variable manufacturing overhead per machine-hour $ 3.90 Recently, Job M759 was completed. It required 60 machine-hours. The amount of overhead applied to Job M759 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $750 B) $516 C) $984 D) $234

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $344,000 + ($3.90 per machine-hour × 40,000 machine-hours) = $344,000 + $156,000 = $500,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $500,000 ÷ 40,000 machine-hours = $12.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.50 per machine-hour × 60 machine-hours = $750 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

86) Odonnel Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $36,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 10,000 direct labor-hours. The estimated total manufacturing overhead is closest to: A) $64,000 B) $36,000 C) $28,000 D) $36,003

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $36,000 + ($2.80 per direct labor-hour × 10,000 direct labor-hours) = $36,000 + $28,000 = $64,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

85) Dejarnette Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $ 416,000 Variable manufacturing overhead per machine-hour $ 3.10 The predetermined overhead rate is closest to: A) $8.30 per machine-hour B) $11.40 per machine-hour C) $5.20 per machine-hour D) $3.10 per machine-hour

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $416,000 + ($3.10 per machine-hour × 80,000 machine-hours) = $416,000 + $248,000 = $664,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $664,000 ÷ 80,000 machine-hours = $8.30 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

25) Assigning manufacturing overhead to a specific job is complicated by all of the below except: A) Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a particular job. B) Manufacturing overhead is incurred only to support some jobs. C) Manufacturing overhead consists of both variable and fixed costs. D) The average cost of actual fixed manufacturing overhead expenses will vary depending on how many units are produced in a period.

answer: B Difficulty: 2 Medium Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

153) Cull Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $462,000, variable manufacturing overhead of $2.20 per machine-hour, and 60,000 machine-hours. The company has provided the following data concerning Job X455 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $940 Direct labor cost $2,240 The total job cost for Job X455 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $3,972 B) $1,732 C) $3,180 D) $3,032

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $462,000 + ($2.20 per machine-hour × 60,000 machine-hours) = $462,000 + $132,000 = $594,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $594,000 ÷ 60,000 machine-hours = $9.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.90 per machine-hour × 80 machine-hours = $792 Direct materials $ 940 Direct labor 2,240 Manufacturing overhead applied 792 Total cost of Job X455 $ 3,972 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

117) Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed: Number of units in the job 40 Total direct labor-hours 80 Direct materials $950 Direct labor cost $2,720 The total job cost for Job T498 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $4,430 B) $3,670 C) $1,710 D) $3,480

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $497,000 + ($2.40 per direct labor-hour × 70,000 direct labor-hours) = $497,000 + $168,000 = $665,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $665,000 ÷ 70,000 direct labor-hours = $9.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.50 per direct labor-hour × 80 direct labor-hours = $760 Direct materials $ 950 Direct labor 2,720 Manufacturing overhead applied 760 Total cost of Job T498 $ 4,430 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

114) Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed: Number of units in the job 40 Total direct labor-hours 80 Direct materials $950 Direct labor cost $2,720 The estimated total manufacturing overhead is closest to: A) $665,000 B) $497,002 C) $497,000 D) $168,000

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $497,000 + ($2.40 per direct labor-hour × 70,000 direct labor-hours) = $497,000 + $168,000 = $665,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

145) Levron Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,640 The unit product cost for Job P978 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $176.60 B) $157.00 C) $44.60 D) $44.15

answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $58,000 + ($2.00 per machine-hour × 20,000 machine-hours) = $58,000 + $40,000 = $98,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $98,000 ÷ 20,000 machine-hours = $4.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.90 per machine-hour × 80 machine-hours = $392 Direct materials $ 500 Direct labor 2,640 Manufacturing overhead applied 392 Total cost of Job P978 $ 3,532 Total cost of Job P978 (a) $3,532 Number of units (b) 20 Unit product cost (a) ÷ (b) $176.60 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

229) Marciante Corporation has two production departments, Casting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Finishing Machine-hours 17,000 10,000 Direct labor-hours 2,000 5,000 Total fixed manufacturing overhead cost $ 105,400 $ 52,000 Variable manufacturing overhead per machine-hour $ 1.70 Variable manufacturing overhead per direct labor-hour $ 3.90 The estimated total manufacturing overhead for the Finishing Department is closest to: A) $71,500 B) $52,000 C) $34,794 D) $19,500

answer: A Explanation: Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $52,000 + ($3.90 per direct labor-hour × 5,000 direct labor-hours) = $52,000 + $19,500 = $71,500 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

215) Ahlheim Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 16,000 15,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 102,400 $ 55,200 Variable manufacturing overhead per machine-hour $ 2.30 Variable manufacturing overhead per direct labor-hour $ 4.50 During the current month the company started and finished Job T924. The following data were recorded for this job: Job T924: Forming Assembly Machine-hours 70 20 Direct labor-hours 30 40 Direct materials $ 870 $ 385 Direct labor cost $ 630 $ 840 The total amount of overhead applied in both departments to Job T924 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,157 B) $548 C) $609 D) $1,705

answer: A Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,400 + ($2.30 per machine-hour × 16,000 machine-hours) = $102,400 + $36,800 = $139,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $139,200 ÷ 16,000 machine-hours = $8.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.70 per machine-hour × 70 machine-hours = $609 Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $55,200 + ($4.50 per direct labor-hour × 6,000 direct labor-hours) = $55,200 + $27,000 = $82,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $82,200 ÷ 6,000 direct labor-hours = $13.70 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.70 per direct labor-hour × 40 direct labor-hours = $548 Overhead applied to Job T924 Forming Department $ 609 Assembly Department 548 Total $ 1,157 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

64) Columbo Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 17,000 10,000 Direct labor-hours 1,000 9,000 Total fixed manufacturing overhead cost $ 110,500 $ 78,300 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job A948. The following data were recorded for this job: Job A948: Forming Finishing Machine-hours 70 30 Direct labor-hours 10 50 Direct materials $ 650 $ 330 Direct labor cost $ 380 $ 1,900 If the company marks up its manufacturing costs by 40% then the selling price for Job A948 would be closest to: (Round your intermediate calculations to 2 decimal places.) A) $6,197.80 B) $1,770.80 C) $4,427.00 D) $6,818.00

answer: A Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $110,500 + ($1.60 per machine-hour × 17,000 machine-hours) = $110,500 + $27,200 = $137,700 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $137,700 ÷ 17,000 machine-hours = $8.10 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.10 per machine-hour × 70 machine-hours = $567 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $78,300 + ($3.30 per direct labor-hour × 9,000 direct labor-hours) = $78,300 + $29,700 = $108,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $108,000 ÷ 9,000 direct labor-hours = $12.00 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.00 per direct labor-hour × 50 direct labor-hours = $600 Forming Finishing Total Direct materials $ 650 $ 330 $ 980 Direct labor $ 380 $ 1,900 2,280 Manufacturing overhead applied $ 567 $ 600 1,167 Total cost of Job A948 $ 4,427 Total cost of Job A948 $ 4,427.00 Markup ($4,427.00 × 40%) 1,770.80 Selling price $ 6,197.80 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

203) Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60 The estimated total manufacturing overhead for the Machining Department is closest to: A) $137,600 B) $104,000 C) $33,600 D) $310,933

answer: A Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $104,000 + ($2.10 per machine-hour × 16,000 machine-hours) = $104,000 + $33,600 = $137,600 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

75) Prayer Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 19,000 13,000 Direct labor-hours 1,000 8,000 Total fixed manufacturing overhead cost $ 110,200 $ 68,800 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 3.60 The estimated total manufacturing overhead for the Machining Department is closest to: A) $148,200 B) $110,200 C) $38,000 D) $299,725

answer: A Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $110,200 + ($2.00 per machine-hour × 19,000 machine-hours) = $110,200 + $38,000 = $148,200 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

31) Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to: A) $10.37 B) $12.10 C) $11.10 D) $11.30

answer: B Explanation: Estimated total fixed manufacturing overhead (a) $ 121,000 Estimated activity level (b) 10,000 Predetermined overhead rate (a) ÷ (b) $ 12.10 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

212) Vanliere Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 11,000 Direct labor-hours 3,000 6,000 Total fixed manufacturing overhead cost $ 138,700 $ 52,800 Variable manufacturing overhead per machine-hour $ 1.90 Variable manufacturing overhead per direct labor-hour $ 3.80 During the current month the company started and finished Job A803. The following data were recorded for this job: Job A803: Machining Finishing Machine-hours 90 20 Direct labor-hours 20 60 The amount of overhead applied in the Machining Department to Job A803 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $828.00 B) $792.00 C) $171.00 D) $174,800.00

answer: A Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $138,700 + ($1.90 per machine-hour × 19,000 machine-hours) = $138,700 + $36,100 = $174,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $174,800 ÷ 19,000 machine-hours = $9.20 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.20 per machine-hour × 90 machine-hours = $828 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

78) Sargent Corporation applies overhead cost to jobs on the basis of 80% of direct labor cost. If Job 210 shows $10,000 of manufacturing overhead cost applied, how much was the direct labor cost on the job? A) $12,500 B) $11,000 C) $8,000 D) $10,000

answer: A Explanation: Manufacturing overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $10,000 = 0.80 × Direct labor cost Direct labor cost = $10,000 ÷ 0.80 = $12,500 Difficulty: 2 Medium Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

137) Ronson Corporation has two manufacturing departments—Casting and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Customizing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 27,500 $ 10,500 $ 38,000 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.60 During the most recent month, the company started and completed two jobs—Job C and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job C Job G Direct materials $ 10,600 $ 6,800 Direct labor cost $ 23,700 $ 7,900 Casting machine-hours 3,400 1,600 Customizing machine-hours 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job G is closest to: (Round your intermediate calculations to 2 decimal places.) A) $42,070 B) $27,370 C) $6,800 D) $7,900

answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 27,500 Estimated variable manufacturing overhead ($1.70 per MH × 5,000 MHs) 8,500 Estimated total manufacturing overhead cost $ 36,000 Customizing Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.60 per MH × 5,000 MHs) 13,000 Estimated total manufacturing overhead cost $ 23,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($36,000 + $23,500 = $59,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 59,500 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.95 per MH The overhead applied to Job G is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.95 per MH × (1,600 MHs + 3,000 MHs) = $5.95 per MH × (4,600 MHs) = $27,370 Job G's manufacturing cost: Direct materials $ 6,800 Direct labor cost 7,900 Manufacturing overhead applied 27,370 Total manufacturing cost $ 42,070 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

197) Heroux Corporation has two manufacturing departments—Forming and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Customizing Total Estimated total machine-hours (MHs) 3,000 7,000 10,000 Estimated total fixed manufacturing overhead cost $ 16,500 $ 20,300 $ 36,800 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Direct materials $ 12,800 $ 6,700 Direct labor cost $ 24,300 $ 7,800 Forming machine-hours 2,000 1,000 Customizing machine-hours 2,800 4,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job A is closest to: (Round your intermediate calculations to 2 decimal places.) A) $28,512 B) $16,632 C) $11,880 D) $17,664

answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 16,500 Estimated variable manufacturing overhead ($1.70 per MH × 3,000 MHs) 5,100 Estimated total manufacturing overhead cost $ 21,600 Customizing Estimated fixed manufacturing overhead $ 20,300 Estimated variable manufacturing overhead ($2.50 per MH × 7,000 MHs) 17,500 Estimated total manufacturing overhead cost $ 37,800 The second step is to combine the estimated manufacturing overhead costs in the two departments ($21,600 + $37,800 = $59,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 59,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.94 per MH The overhead applied to Job A is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.94 per MH × (2,000 MHs + 2,800 MHs) = $5.94 per MH × (4,800 MHs) = $28,512 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

46) Mundorf Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 9,000 1,000 10,000 Estimated total fixed manufacturing overhead cost $ 52,200 $ 2,400 $ 54,600 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 2.10 During the most recent month, the company started and completed two jobs—Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job B Job H Forming machine-hours 6,100 2,900 Assembly machine-hours 400 600 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to: A) $48,555 B) $35,490 C) $2,988 D) $45,567

answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 52,200 Estimated variable manufacturing overhead ($2.00 per MH × 9,000 MHs) 18,000 Estimated total manufacturing overhead cost $ 70,200 Assembly Estimated fixed manufacturing overhead $ 2,400 Estimated variable manufacturing overhead ($2.10 per MH × 1,000 MHs) 2,100 Estimated total manufacturing overhead cost $ 4,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($70,200 + $4,500 = $74,700) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 74,700 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 7.47 per MH The overhead applied to Job B is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $7.47 per MH × (6,100 MHs + 400 MHs) = $7.47 per MH × (6,500 MHs) = $48,555 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

43) Almaraz Corporation has two manufacturing departments—Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Finishing Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 40,600 $ 8,100 $ 48,700 Estimated variable manufacturing overhead cost per MH $ 1.30 $ 2.80 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to: A) $6.62 B) $4.87 C) $4.10 D) $7.10

answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 40,600 Estimated variable manufacturing overhead ($1.30 per MH × 7,000 MHs) 9,100 Estimated total manufacturing overhead cost $ 49,700 Finishing Estimated fixed manufacturing overhead $ 8,100 Estimated variable manufacturing overhead ($2.80 per MH × 3,000 MHs) 8,400 Estimated total manufacturing overhead cost $ 16,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($49,700 + $16,500 = $66,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 66,200 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.62 per MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

160) Halbur Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 6,000 4,000 10,000 Estimated total fixed manufacturing overhead cost $ 33,600 $ 10,000 $ 43,600 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.80 During the most recent month, the company started and completed two jobs—Job C and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job C Job J Direct materials $ 11,300 $ 8,100 Direct labor cost $ 18,500 $ 6,300 Machining machine-hours 4,100 1,900 Customizing machine-hours 1,600 2,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job J is closest to: (Round your intermediate calculations to 2 decimal places.) A) $28,208 B) $18,748 C) $12,464 D) $15,744

answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 33,600 Estimated variable manufacturing overhead ($1.80 per MH × 6,000 MHs) 10,800 Estimated total manufacturing overhead cost $ 44,400 Customizing Estimated fixed manufacturing overhead $ 10,000 Estimated variable manufacturing overhead ($2.80 per MH × 4,000 MHs) 11,200 Estimated total manufacturing overhead cost $ 21,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($44,400 + $21,200 = $65,600) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 65,600 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.56 per MH The overhead applied to Job J is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.56 per MH × (1,900 MHs + 2,400 MHs) = $6.56 per MH × (4,300 MHs) = $28,208 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

51) Koelsch Corporation has two manufacturing departments—Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,000 $ 25,200 $ 29,200 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 3.00 During the most recent month, the company started and completed two jobs—Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job F Job K Direct materials $ 12,300 $ 8,400 Direct labor cost $ 18,200 $ 6,800 Molding machine-hours 700 300 Customizing machine-hours 3,600 5,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job K is closest to: (Round your intermediate calculations to 2 decimal places.) A) $72,561 B) $79,817 C) $24,187 D) $48,374

answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $ 4,000 Estimated variable manufacturing overhead ($2.00 per MH × 1,000 MHs) 2,000 Estimated total manufacturing overhead cost $ 6,000 Customizing Estimated fixed manufacturing overhead $ 25,200 Estimated variable manufacturing overhead ($3.00 per MH × 9,000 MHs) 27,000 Estimated total manufacturing overhead cost $ 52,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($6,000 + $52,200 = $58,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 58,200 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.82 per MH The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.82 per MH × (300 MHs + 5,400 MHs) = $5.82 per MH × (5,700 MHs) = $33,174 Job K's manufacturing cost: Direct materials $ 8,400 Direct labor cost 6,800 Manufacturing overhead applied 33,174 Total manufacturing cost $ 48,374 The selling price for Job K: Total manufacturing cost $ 48,374 Markup (50%) 24,187 Selling price $ 72,561 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

56) Stockmaster Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 27,000 $ 10,500 $ 37,500 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.80 During the most recent month, the company started and completed two jobs—Job C and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job C Job H Direct materials $ 11,200 $ 7,500 Direct labor cost $ 21,000 $ 7,800 Forming machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job C is closest to: (Round your intermediate calculations to 2 decimal places.) A) $96,989 B) $88,172 C) $25,192 D) $62,980

answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 27,000 Estimated variable manufacturing overhead ($1.10 per MH × 5,000 MHs) 5,500 Estimated total manufacturing overhead cost $ 32,500 Assembly Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.80 per MH × 5,000 MHs) 14,000 Estimated total manufacturing overhead cost $ 24,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($32,500 + $24,500 = $57,000) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 57,000 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.70 per MH The overhead applied to Job C is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.70 per MH × (3,400 MHs + 2,000 MHs) = $5.70 per MH × (5,400 MHs) = $30,780 Job C's manufacturing cost: Direct materials $ 11,200 Direct labor cost 21,000 Manufacturing overhead applied 30,780 Total manufacturing cost $ 62,980 The selling price for Job C: Total manufacturing cost $ 62,980 Markup (40%) 25,192 Selling price $ 88,172 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

241) Mccaughan Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated labor-hours 37,000 Estimated variable manufacturing overhead $ 4.43 per labor-hour Estimated total fixed manufacturing overhead $ 705,220 Actual labor-hours for the year 32,100 Required: Compute the company's predetermined overhead rate for the recently completed year.

answer: Estimated total manufacturing overhead = $705,220 + ($4.43 per labor-hour × 37,000 labor-hours) = $869,130 Predetermined overhead rate = $869,130 ÷ 37,000 labor-hours = $23.49 per labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

190) Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 18,000 13,000 Direct labor-hours 4,000 7,000 Total fixed manufacturing overhead cost $ 113,400 $ 64,400 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.90 During the current month the company started and finished Job A319. The following data were recorded for this job: Job A319: Milling Customizing Machine-hours 60 10 Direct labor-hours 20 60 Direct materials $ 655 $ 305 Direct labor cost $ 400 $ 1,200 The amount of overhead applied in the Customizing Department to Job A319 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $234.00 B) $786.00 C) $552.00 D) $91,700.00

answer: B Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $64,400 + ($3.90 per direct labor-hour × 7,000 direct labor-hours) = $64,400 + $27,300 = $91,700 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $91,700 ÷ 7,000 direct labor-hours = $13.10 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.10 per direct labor-hour × 60 direct labor-hours = $786 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

58) Coates Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $249,000, variable manufacturing overhead of $3.80 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job X784 which was recently completed: Number of units in the job 50 Total machine-hours 250 Direct materials $ 470 Direct labor cost $ 5,500 If the company marks up its unit product costs by 30% then the selling price for a unit in Job X784 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $253.87 B) $233.87 C) $53.97 D) $155.22

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $249,000 + ($3.80 per machine-hour × 30,000 machine-hours) = $249,000 + $114,000 = $363,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $363,000 ÷ 30,000 machine-hours = $12.10 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.10 per machine-hour × 250 machine-hours = $3,025 Direct materials $ 470 Direct labor 5,500 Manufacturing overhead applied 3,025 Total cost of Job X784 $ 8,995 Total cost of Job X784 (a) $ 8,995 Number of units (b) 50 Unit product cost (a) ÷ (b) $ 179.90 Unit product cost for Job X784 $ 179.90 Markup (30% × $179.90) 53.97 Selling price $ 233.87 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

146) Levron Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,640 If the company marks up its unit product costs by 30% then the selling price for a unit in Job P978 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $249.58 B) $229.58 C) $204.10 D) $52.98

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $58,000 + ($2.00 per machine-hour × 20,000 machine-hours) = $58,000 + $40,000 = $98,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $98,000 ÷ 20,000 machine-hours = $4.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.90 per machine-hour × 80 machine-hours = $392 Direct materials $ 500 Direct labor 2,640 Manufacturing overhead applied 392 Total cost of Job P978 $ 3,532 Total cost of Job P978 (a) $3,532 Number of units (b) 20 Unit product cost (a) ÷ (b) $176.60 Unit product cost for Job P978 $ 176.60 Markup (30% × $176.60) 52.98 Selling price $ 229.58 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

105) Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 40,000 Total fixed manufacturing overhead cost $ 96,000 Variable manufacturing overhead per direct labor-hour $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 20 Total direct labor-hours 100 Direct materials $ 755 Direct labor cost $ 4,000 The unit product cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $237.75 B) $264.75 C) $64.75 D) $52.95

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.00 per direct labor-hour × 40,000 direct labor-hours) = $96,000 + $120,000 = $216,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $216,000 ÷ 40,000 direct labor-hours = $5.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.40 per direct labor-hour × 100 direct labor-hours = $540 Direct materials $ 755 Direct labor 4,000 Manufacturing overhead applied 540 Total cost of Job P951 $ 5,295 Total cost of Job P951 (a) $ 5,295 Number of units (b) 20 Unit product cost (a) ÷ (b) $ 264.75 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

87) Odonnel Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $36,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 10,000 direct labor-hours. The predetermined overhead rate is closest to: A) $2.80 per direct labor-hour B) $6.40 per direct labor-hour C) $3.60 per direct labor-hour D) $9.20 per direct labor-hour

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $36,000 + ($2.80 per direct labor-hour × 10,000 direct labor-hours) = $36,000 + $28,000 = $64,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $64,000 ÷ 10,000 direct labor-hours = $6.40 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

183) Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 12,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 136,800 $ 69,600 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.20 During the current month the company started and finished Job K928. The following data were recorded for this job: Job K928: Machining Finishing Machine-hours 90 10 Direct labor-hours 30 50 Direct materials $ 775 $ 415 Direct labor cost $ 630 $ 1,050 The total job cost for Job K928 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $810 B) $4,275 C) $2,060 D) $2,215

answer: B Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $136,800 + ($1.80 per machine-hour × 19,000 machine-hours) = $136,800 + $34,200 = $171,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.00 per machine-hour × 90 machine-hours = $810 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $69,600 + ($3.20 per direct labor-hour × 8,000 direct labor-hours) = $69,600 + $25,600 = $95,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $95,200 ÷ 8,000 direct labor-hours = $11.90 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.90 per direct labor-hour × 50 direct labor-hours = $595 Machining Finishing Total Direct materials $ 775 $ 415 $ 1,190 Direct labor $ 630 $ 1,050 1,680 Manufacturing overhead applied $ 810 $ 595 1,405 Total cost of Job K928 $ 4,275 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

181) Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 12,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 136,800 $ 69,600 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.20 During the current month the company started and finished Job K928. The following data were recorded for this job: Job K928: Machining Finishing Machine-hours 90 10 Direct labor-hours 30 50 Direct materials $ 775 $ 415 Direct labor cost $ 630 $ 1,050 The amount of overhead applied in the Machining Department to Job K928 is closest to: A) $783.00 B) $810.00 C) $162.00 D) $171,000.00

answer: B Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $136,800 + ($1.80 per machine-hour × 19,000 machine-hours) = $136,800 + $34,200 = $171,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.00 per machine-hour × 90 machine-hours = $810 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

192) Sanderlin Corporation has two manufacturing departments—Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Finishing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 26,500 $ 13,500 $ 40,000 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 3.00 During the most recent month, the company started and completed two jobs—Job C and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job C Job L Direct materials $ 12,500 $ 8,200 Direct labor cost $ 20,200 $ 6,400 Machining machine-hours 3,400 1,600 Finishing machine-hours 2,000 3,000 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job L is closest to: (Round your intermediate calculations to 2 decimal places.) A) $11,680 B) $28,780 C) $17,100 D) $29,900

answer: B Explanation: Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 26,500 Estimated variable manufacturing overhead ($2.00 per MH × 5,000 MHs) 10,000 Estimated total manufacturing overhead cost (a) $ 36,500 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.30 /MH Finishing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 13,500 Estimated variable manufacturing overhead ($3.00 per MH × 5,000 MHs) 15,000 Estimated total manufacturing overhead cost (a) $ 28,500 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.70 /MH Manufacturing overhead applied to Job L: Machining ($7.30 per MH × 1,600 MHs) $ 11,680 Finishing ($5.70 per MH × 3,000 MHs) 17,100 Total manufacturing overhead applied $ 28,780 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

90) Morataya Corporation has two manufacturing departments—Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 39,200 $ 6,600 $ 45,800 Estimated variable manufacturing overhead cost per MH $ 1.90 $ 2.10 During the most recent month, the company started and completed two jobs—Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job B Job G Direct materials $ 14,800 $ 8,300 Direct labor cost $ 22,000 $ 8,900 Machining machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job G is closest to: (Round your intermediate calculations to 2 decimal places.) A) $14,388 B) $26,160 C) $11,772 D) $18,320

answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 39,200 Estimated variable manufacturing overhead ($1.90 per MH × 7,000 MHs) 13,300 Estimated total manufacturing overhead cost $ 52,500 Assembly Estimated fixed manufacturing overhead $ 6,600 Estimated variable manufacturing overhead ($2.10 per MH × 3,000 MHs) 6,300 Estimated total manufacturing overhead cost $ 12,900 The second step is to combine the estimated manufacturing overhead costs in the two departments ($52,500 + $12,900 = $65,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 65,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.54 per MH The overhead applied to Job G is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.54 per MH × (2,200 MHs + 1,800 MHs) = $6.54 per MH × (4,000 MHs) = $26,160 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

27) Which of the following would usually be found on a job cost sheet under a normal cost system? Actual direct material cost Actual manufacturing overhead cost A) Yes Yes B) Yes No C) No Yes D) No No A) Choice A B) Choice B C) Choice C D) Choice D

answer: B Difficulty: 1 Easy Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

174) Macnamara Corporation has two manufacturing departments—Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 8,800 $ 13,600 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.90 During the most recent month, the company started and completed two jobs—Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job F Job M Direct materials $ 11,500 $ 9,000 Direct labor cost $ 18,400 $ 7,400 Casting machine-hours 700 300 Finishing machine-hours 1,600 2,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job F is closest to: (Round your intermediate calculations to 2 decimal places.) A) $4,620 B) $12,780 C) $12,420 D) $8,160

answer: B Explanation: Casting Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 4,800 Estimated variable manufacturing overhead ($1.80 per MH × 1,000 MHs) 1,800 Estimated total manufacturing overhead cost (a) $ 6,600 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 6.60 /MH Finishing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 8,800 Estimated variable manufacturing overhead ($2.90 per MH × 4,000 MHs) 11,600 Estimated total manufacturing overhead cost (a) $ 20,400 Estimated total machine-hours (b) 4,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.10 /MH Manufacturing overhead applied to Job F: Casting ($6.60 per MH × 700 MHs) $ 4,620 Finishing ($5.10 per MH × 1,600 MHs) 8,160 Total manufacturing overhead applied $ 12,780 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

47) Parido Corporation has two manufacturing departments—Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 8,000 2,000 10,000 Estimated total fixed manufacturing overhead cost $ 44,000 $ 4,200 $ 48,200 Estimated variable manufacturing overhead cost per MH $ 1.90 $ 3.00 During the most recent month, the company started and completed two jobs—Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Casting machine-hours 5,400 2,600 Assembly machine-hours 800 1,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job H is closest to: (Round your intermediate calculations to 2 decimal places.) A) $8,328 B) $26,372 C) $18,316 D) $18,044

answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 44,000 Estimated variable manufacturing overhead ($1.90 per MH × 8,000 MHs) 15,200 Estimated total manufacturing overhead cost $ 59,200 Assembly Estimated fixed manufacturing overhead $ 4,200 Estimated variable manufacturing overhead ($3.00 per MH × 2,000 MHs) 6000 Estimated total manufacturing overhead cost $ 10,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($59,200 + $10,200 = $69,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 69,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.94 per MH The overhead applied to Job H is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.94 per MH × (2,600 MHs + 1,200 MHs) = $6.94 per MH × (3,800 MHs) = $26,372 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

168) Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 19,000 15,000 Direct labor-hours 4,000 8,000 Total fixed manufacturing overhead cost $ 129,200 $ 77,600 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job T288. The following data were recorded for this job: Job T288: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 40 Direct materials $ 730 $ 380 Direct labor cost $ 900 $ 1,200 The estimated total manufacturing overhead for the Assembly Department is closest to: A) $77,600 B) $101,600 C) $56,674 D) $24,000

answer: B Explanation: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $77,600 + ($3.00 per direct labor-hour × 8,000 direct labor-hours) = $77,600 + $24,000 = $101,600 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

169) Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 19,000 15,000 Direct labor-hours 4,000 8,000 Total fixed manufacturing overhead cost $ 129,200 $ 77,600 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job T288. The following data were recorded for this job: Job T288: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 40 Direct materials $ 730 $ 380 Direct labor cost $ 900 $ 1,200 The predetermined overhead rate for the Assembly Department is closest to: A) $3.00 per direct labor-hour B) $12.70 per direct labor-hour C) $9.70 per direct labor-hour D) $5.35 per direct labor-hour

answer: B Explanation: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $77,600 + ($3.00 per direct labor-hour × 8,000 direct labor-hours) = $77,600 + $24,000 = $101,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $101,600 ÷ 8,000 direct labor-hours = $12.70 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

242) Moscone Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 78,000 labor-hours. The estimated variable manufacturing overhead was $9.99 per labor-hour and the estimated total fixed manufacturing overhead was $985,920. Required: Compute the company's predetermined overhead rate.

answer: Estimated total manufacturing overhead = $985,920 + ($9.99 per labor-hour × 78,000 labor-hours) = $1,765,140 Predetermined overhead rate = $1,765,140 ÷ 78,000 labor-hours = $22.63 per labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

217) Merati Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 28,000 $ 10,500 $ 38,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.60 During the most recent month, the company started and completed two jobs—Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job B Job L Forming machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Assembly Department is closest to: A) $2.60 B) $4.70 C) $6.05 D) $2.10

answer: B Explanation: Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.60 per MH × 5,000 MHs) 13,000 Estimated total manufacturing overhead cost (a) $ 23,500 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 4.70 /MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

228) Marciante Corporation has two production departments, Casting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Finishing Machine-hours 17,000 10,000 Direct labor-hours 2,000 5,000 Total fixed manufacturing overhead cost $ 105,400 $ 52,000 Variable manufacturing overhead per machine-hour $ 1.70 Variable manufacturing overhead per direct labor-hour $ 3.90 The estimated total manufacturing overhead for the Casting Department is closest to: A) $387,260 B) $134,300 C) $28,900 D) $105,400

answer: B Explanation: Casting Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $105,400 + ($1.70 per machine-hour × 17,000 machine-hours) = $105,400 + $28,900 = $134,300 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

65) Lotz Corporation has two manufacturing departments—Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 2,000 8,000 10,000 Estimated total fixed manufacturing overhead cost $ 10,200 $ 19,200 $ 29,400 Estimated variable manufacturing overhead cost per MH $ 1.20 $ 2.20 During the most recent month, the company started and completed two jobs—Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job F Job K Direct materials $ 14,400 $ 7,100 Direct labor cost $ 22,500 $ 6,600 Casting machine-hours 1,400 600 Finishing machine-hours 3,200 4,800 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job F is closest to: (Round your intermediate calculations to 2 decimal places.) A) $30,220 B) $90,660 C) $60,440 D) $96,100

answer: B Explanation: Casting Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 10,200 Estimated variable manufacturing overhead ($1.20 per MH × 2,000 MHs) 2,400 Estimated total manufacturing overhead cost (a) $ 12,600 Estimated total machine-hours (b) 2,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 6.30 /MH Finishing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 19,200 Estimated variable manufacturing overhead ($2.20 per MH × 8,000 MHs) 17,600 Estimated total manufacturing overhead cost (a) $ 36,800 Estimated total machine-hours (b) 8,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 4.60 /MH Manufacturing overhead applied to Job F: Casting ($6.30 per MH × 1,400 MHs) $ 8,820 Finishing ($4.60 per MH × 3,200 MHs) 14,720 Total manufacturing overhead applied $ 23,540 The selling price for Job F would be calculated as follows: Direct materials $ 14,400 Direct labor cost 22,500 Manufacturing overhead applied 23,540 Total manufacturing cost $ 60,440 Markup (50%) 30,220 Selling price $ 90,660 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

208) Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60 The amount of overhead applied in the Customizing Department to Job T272 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $76,200.00 B) $762.00 C) $564.00 D) $198.00

answer: B Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $56,400 + ($3.30 per direct labor-hour × 6,000 direct labor-hours) = $56,400 + $19,800 = $76,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $76,200 ÷ 6,000 direct labor-hours = $12.70 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.70 per direct labor-hour × 60 direct labor-hours = $762 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

235) Linnear Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $144,000 Variable manufacturing overhead per machine-hour $4.00 Required: Calculate the estimated total manufacturing overhead for the year.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $144,000 + ($4.00 per machine-hour × 30,000 machine-hours) = $144,000 + $120,000 = $264,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

206) Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60 The predetermined overhead rate for the Customizing Department is closest to: A) $3.30 per direct labor-hour B) $12.70 per direct labor-hour C) $9.40 per direct labor-hour D) $4.76 per direct labor-hour

answer: B Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $56,400 + ($3.30 per direct labor-hour × 6,000 direct labor-hours) = $56,400 + $19,800 = $76,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $76,200 ÷ 6,000 direct labor-hours = $12.70 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

73) Swango Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Customizing Machine-hours 19,000 11,000 Direct labor-hours 1,000 8,000 Total fixed manufacturing overhead cost $ 138,700 $ 86,400 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.00 The estimated total manufacturing overhead for the Customizing Department is closest to: A) $24,000 B) $110,400 C) $86,400 D) $60,379

answer: B Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $86,400 + ($3.00 per direct labor-hour × 8,000 direct labor-hours) = $86,400 + $24,000 = $110,400 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

34) Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 36,000 Estimated variable manufacturing overhead $ 3.01 per machine-hour Estimated total fixed manufacturing overhead $ 1,058,040 The predetermined overhead rate for the recently completed year was closest to: A) $29.39 per machine-hour B) $32.40 per machine-hour C) $32.81 per machine-hour D) $3.01 per machine-hour

answer: B Explanation: Estimated total manufacturing overhead = $1,058,040 + ($3.01 per machine-hour × 36,000 machine-hours) = $1,166,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,166,400 ÷ 36,000 machine-hours = $32.40 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

39) Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 39,000 Estimated variable manufacturing overhead $ 6.76 per machine-hour Estimated total fixed manufacturing overhead $ 794,430 Actual machine-hours for the year 42,700 The predetermined overhead rate for the recently completed year was closest to: A) $25.37 per machine-hour B) $27.13 per machine-hour C) $6.76 per machine-hour D) $20.37 per machine-hour

answer: B Explanation: Estimated total manufacturing overhead =$794,430 + ($6.76 per machine-hour × 39,000 machine-hours) = $1,058,070 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,058,070 ÷ 39,000 machine-hours = $27.13 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

49) Carradine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $105,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. The company recently completed Job P233 which required 60 machine-hours. The amount of overhead applied to Job P233 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $90 B) $270 C) $450 D) $180

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $105,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $105,000 + $210,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 70,000 machine-hours = $4.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.50 per machine-hour × 60 machine-hours = $270 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

108) Branin Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $160,000, variable manufacturing overhead of $3.40 per direct labor-hour, and 80,000 direct labor-hours. The company has provided the following data concerning Job A578 which was recently completed: Total direct labor-hours 250 Direct materials $ 715 Direct labor cost $ 9,000 The amount of overhead applied to Job A578 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $500 B) $1,350 C) $2,200 D) $850

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $160,000 + ($3.40 per direct labor-hour × 80,000 direct labor-hours) = $160,000 + $272,000 = $432,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $432,000 ÷ 80,000 direct labor-hours = $5.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.40 per direct labor-hour × 250 direct labor-hours = $1,350 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

128) Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 50 Direct materials $920 Direct labor cost $1,400 The unit product cost for Job K818 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $51.90 B) $259.50 C) $232.00 D) $119.50

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $162,000 + ($2.80 per direct labor-hour × 60,000 direct labor-hours) = $162,000 + $168,000 = $330,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $330,000 ÷ 60,000 direct labor-hours = $5.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.50 per direct labor-hour × 50 direct labor-hours = $275 Direct materials $ 920 Direct labor 1,400 Manufacturing overhead applied 275 Total cost of Job K818 $ 2,595 Total cost of Job K818 (a) $2,595 Number of units (b) 10 Unit product cost (a) ÷ (b) $259.50 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

111) Spang Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 20,000 Total fixed manufacturing overhead cost $ 176,000 Variable manufacturing overhead per machine-hour $ 2.20 Recently, Job P505 was completed with the following characteristics: Total machine-hours 200 Direct materials $ 540 Direct labor cost $ 7,200 The total job cost for Job P505 is closest to: A) $9,400 B) $9,940 C) $7,740 D) $2,740

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $176,000 + ($2.20 per machine-hour × 20,000 machine-hours) = $176,000 + $44,000 = $220,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $220,000 ÷ 20,000 machine-hours = $11.00 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.00 per machine-hour × 200 machine-hours = $2,200 Direct materials $ 540 Direct labor 7,200 Manufacturing overhead applied 2,200 Total cost of Job P505 $ 9,940 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

131) Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $675 Direct labor cost $1,050 The predetermined overhead rate is closest to: A) $12.60 per machine-hour B) $10.50 per machine-hour C) $8.40 per machine-hour D) $2.10 per machine-hour

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 30,000 machine-hours = $10.50 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

36) Dearden Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $144,000, variable manufacturing overhead of $2.00 per machine-hour, and 60,000 machine-hours. The predetermined overhead rate is closest to: A) $2.40 per machine-hour B) $6.40 per machine-hour C) $4.40 per machine-hour D) $2.00 per machine-hour

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $144,000 + ($2.00 per machine-hour × 60,000 machine-hours) = $144,000 + $120,000 = $264,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $264,000 ÷ 60,000 machine-hours = $4.40 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

164) Prather Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 50,000 Total fixed manufacturing overhead cost $ 285,000 Variable manufacturing overhead per direct labor-hour $ 3.80 Recently, Job P513 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 20 Direct materials $ 710 Direct labor cost $ 500 The amount of overhead applied to Job P513 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $76 B) $190 C) $266 D) $114

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $285,000 + ($3.80 per direct labor-hour × 50,000 direct labor-hours) = $285,000 + $190,000 = $475,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $475,000 ÷ 50,000 direct labor-hours = $9.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.50 per direct labor-hour × 20 direct labor-hours = $190 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

148) Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $294,000 Variable manufacturing overhead per machine-hour $2.30 Recently, Job M825 was completed with the following characteristics: Number of units in the job 20 Total machine-hours 80 Direct materials $665 Direct labor cost $1,840 The amount of overhead applied to Job M825 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $184 B) $520 C) $704 D) $336

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $294,000 + ($2.30 per machine-hour × 70,000 machine-hours) = $294,000 + $161,000 = $455,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $455,000 ÷ 70,000 machine-hours = $6.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per machine-hour × 80 machine-hours = $520 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

147) Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $294,000 Variable manufacturing overhead per machine-hour $2.30 Recently, Job M825 was completed with the following characteristics: Number of units in the job 20 Total machine-hours 80 Direct materials $665 Direct labor cost $1,840 The predetermined overhead rate is closest to: A) $8.80 per machine-hour B) $6.50 per machine-hour C) $2.30 per machine-hour D) $4.20 per machine-hour

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $294,000 + ($2.30 per machine-hour × 70,000 machine-hours) = $294,000 + $161,000 = $455,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $455,000 ÷ 70,000 machine-hours = $6.50 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

59) Sutter Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 10,000 Total fixed manufacturing overhead cost $ 35,000 Variable manufacturing overhead per machine-hour $ 2.20 Recently, Job T369 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 40 Direct materials $ 750 Direct labor cost $ 1,560 If the company marks up its unit product costs by 20% then the selling price for a unit in Job T369 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $324.56 B) $304.56 C) $277.20 D) $50.76

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $35,000 + ($2.20 per machine-hour × 10,000 machine-hours) = $35,000 + $22,000 = $57,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $57,000 ÷ 10,000 machine-hours = $5.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.70 per machine-hour × 40 machine-hours = $228 Direct materials $ 750 Direct labor 1,560 Manufacturing overhead applied 228 Total cost of Job T369 $ 2,538 Total cost of Job T369 (a) $ 2,538 Number of units (b) 10 Unit product cost (a) ÷ (b) $ 253.80 Unit product cost for Job T369 $ 253.80 Markup (20% × $253.80) 50.76 Selling price $ 304.56 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

42) Laflame Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $ 357,000 Variable manufacturing overhead per machine-hour $ 3.90 The estimated total manufacturing overhead is closest to: A) $273,000 B) $630,000 C) $357,004 D) $357,000

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $357,000 + ($3.90 per machine-hour × 70,000 machine-hours) = $357,000 + $273,000 = $630,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

60) Doakes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 60,000 Total fixed manufacturing overhead cost $ 378,000 Variable manufacturing overhead per direct labor-hour $ 2.20 Recently, Job M843 was completed with the following characteristics: Number of units in the job 60 Total direct labor-hours 120 Direct materials $ 630 Direct labor cost $ 2,400 The unit product cost for Job M843 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $33.75 B) $67.50 C) $27.50 D) $50.50

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $378,000 + ($2.20 per direct labor-hour × 60,000 direct labor-hours) = $378,000 + $132,000 = $510,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $510,000 ÷ 60,000 direct labor-hours = $8.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.50 per direct labor-hour × 120 direct labor-hours = $1,020 Direct materials $ 630 Direct labor 2,400 Manufacturing overhead applied 1,020 Total cost of Job M843 $ 4,050 Total cost of Job M843 (a) $ 4,050 Number of units (b) 60 Unit product cost (a) ÷ (b) $ 67.50 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

152) Cull Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $462,000, variable manufacturing overhead of $2.20 per machine-hour, and 60,000 machine-hours. The company has provided the following data concerning Job X455 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $940 Direct labor cost $2,240 The amount of overhead applied to Job X455 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $176 B) $792 C) $968 D) $616

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $462,000 + ($2.20 per machine-hour × 60,000 machine-hours) = $462,000 + $132,000 = $594,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $594,000 ÷ 60,000 machine-hours = $9.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.90 per machine-hour × 80 machine-hours = $792 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

94) Gerstein Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.70 per direct labor-hour, and 50,000 direct labor-hours. The company recently completed Job M800 which required 150 direct labor-hours. The predetermined overhead rate is closest to: A) $1.80 per direct labor-hour B) $5.50 per direct labor-hour C) $9.20 per direct labor-hour D) $3.70 per direct labor-hour

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $90,000 + ($3.70 per direct labor-hour × 50,000 direct labor-hours) = $90,000 + $185,000 = $275,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $275,000 ÷ 50,000 direct labor-hours = $5.50 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

93) Gerstein Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.70 per direct labor-hour, and 50,000 direct labor-hours. The company recently completed Job M800 which required 150 direct labor-hours. The estimated total manufacturing overhead is closest to: A) $90,000 B) $275,000 C) $185,000 D) $90,004

answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $90,000 + ($3.70 per direct labor-hour × 50,000 direct labor-hours) = $90,000 + $185,000 = $275,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

177) Hickingbottom Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 17,000 15,000 Direct labor-hours 1,000 7,000 Total fixed manufacturing overhead cost $ 96,900 $ 65,800 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 3.60 During the current month the company started and finished Job M381. The following data were recorded for this job: Job M381: Forming Finishing Machine-hours 80 30 Direct labor-hours 30 40 Direct materials $ 840 $ 350 Direct labor cost $ 750 $ 1,000 The predetermined overhead rate for the Finishing Department is closest to: A) $9.40 per direct labor-hour B) $13.00 per direct labor-hour C) $3.60 per direct labor-hour D) $5.35 per direct labor-hour

answer: B Explanation: Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $65,800 + ($3.60 per direct labor-hour × 7,000 direct labor-hours) = $65,800 + $25,200 = $91,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $91,000 ÷ 7,000 direct labor-hours = $13.00 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

176) Hickingbottom Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 17,000 15,000 Direct labor-hours 1,000 7,000 Total fixed manufacturing overhead cost $ 96,900 $ 65,800 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 3.60 During the current month the company started and finished Job M381. The following data were recorded for this job: Job M381: Forming Finishing Machine-hours 80 30 Direct labor-hours 30 40 Direct materials $ 840 $ 350 Direct labor cost $ 750 $ 1,000 The predetermined overhead rate for the Forming Department is closest to: A) $5.70 per machine-hour B) $7.70 per machine-hour C) $2.00 per machine-hour D) $18.70 per machine-hour

answer: B Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $96,900 + ($2.00 per machine-hour × 17,000 machine-hours) = $96,900 + $34,000 = $130,900 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $130,900 ÷ 17,000 machine-hours = $7.70 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

216) Merati Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 28,000 $ 10,500 $ 38,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.60 During the most recent month, the company started and completed two jobs—Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job B Job L Forming machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Forming Department is closest to: A) $5.60 B) $7.40 C) $1.80 D) $6.05

answer: B Explanation: Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 28,000 Estimated variable manufacturing overhead ($1.80 per MH × 5,000 MHs) 9,000 Estimated total manufacturing overhead cost (a) $ 37,000 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.40 /MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

196) Collini Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 17,000 15,000 Direct labor-hours 3,000 6,000 Total fixed manufacturing overhead cost $ 102,000 $ 61,200 Variable manufacturing overhead per machine-hour $ 1.70 Variable manufacturing overhead per direct labor-hour $ 4.10 During the current month the company started and finished Job T268. The following data were recorded for this job: Job T268: Machining Customizing Machine-hours 80 30 Direct labor-hours 30 50 Direct materials $ 720 $ 380 Direct labor cost $ 900 $ 1,500 If the company marks up its manufacturing costs by 40% then the selling price for Job T268 would be closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,932.40 B) $6,763.40 C) $4,831.00 D) $7,440.00

answer: B Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,000 + ($1.70 per machine-hour × 17,000 machine-hours) = $102,000 + $28,900 = $130,900 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $130,900 ÷ 17,000 machine-hours = $7.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.70 per machine-hour × 80 machine-hours = $616 Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $61,200 + ($4.10 per direct labor-hour × 6,000 direct labor-hours) = $61,200 + $24,600 = $85,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $85,800 ÷ 6,000 direct labor-hours = $14.30 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.30 per direct labor-hour × 50 direct labor-hours = $715 Machining Customizing Total Direct materials $ 720 $ 380 $ 1,100 Direct labor $ 900 $ 1,500 2,400 Manufacturing overhead applied $ 616 $ 715 1,331 Total cost of Job T268 $ 4,831 Total cost of Job T268 $ 4,831.00 Markup ($4,831.00 × 40%) 1,932.40 Selling price $ 6,763.40 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

180) Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 12,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 136,800 $ 69,600 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.20 During the current month the company started and finished Job K928. The following data were recorded for this job: Job K928: Machining Finishing Machine-hours 90 10 Direct labor-hours 30 50 Direct materials $ 775 $ 415 Direct labor cost $ 630 $ 1,050 The predetermined overhead rate for the Machining Department is closest to: A) $7.20 per machine-hour B) $9.00 per machine-hour C) $21.38 per machine-hour D) $1.80 per machine-hour

answer: B Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $136,800 + ($1.80 per machine-hour × 19,000 machine-hours) = $136,800 + $34,200 = $171,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

77) Huang Aerospace Corporation manufactures aviation control panels in two departments, Fabrication and Assembly. In the Fabrication department, Huang uses a predetermined overhead rate of $30 per machine-hour. In the Assembly department, Huang uses a predetermined overhead rate of $12 per direct labor-hour. During the current year, Job #X2984 incurred the following number of hours in each department: Fabrication Assembly Machine-hours 40 12 Direct labor-hours 3 25 What is the total amount of manufacturing overhead that Huang should have applied to Job #X2984 during the current year? A) $1,200 B) $1,500 C) $1,560 D) $1,734

answer: B Explanation: Manufacturing overhead applied to Work in Process: Fabrication Assembly Total Predetermined overhead rate (a) $ 30 /MH $ 12 /DLH Actual total amount of the allocation base (b) 40 MHs 25 DLHs Manufacturing overhead applied (a) × (b) $ 1,200 $ 300 $ 1,500 Difficulty: 2 Medium Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

222) Kroeker Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 17,000 12,000 Direct labor-hours 1,000 9,000 Total fixed manufacturing overhead cost $ 112,200 $ 81,000 Variable manufacturing overhead per machine-hour $ 1.70 Variable manufacturing overhead per direct labor-hour $ 4.30 During the current month the company started and finished Job T898. The following data were recorded for this job: Job T898: Milling Customizing Machine-hours 80 30 Direct labor-hours 20 50 The estimated total manufacturing overhead for the Milling Department is closest to: A) $240,833 B) $141,100 C) $28,900 D) $112,200

answer: B Explanation: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $112,200 + ($1.70 per machine-hour × 17,000 machine-hours) = $112,200 + $28,900 = $141,100 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

191) Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 18,000 13,000 Direct labor-hours 4,000 7,000 Total fixed manufacturing overhead cost $ 113,400 $ 64,400 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.90 During the current month the company started and finished Job A319. The following data were recorded for this job: Job A319: Milling Customizing Machine-hours 60 10 Direct labor-hours 20 60 Direct materials $ 655 $ 305 Direct labor cost $ 400 $ 1,200 If the company marks up its manufacturing costs by 20% then the selling price for Job A319 would be closest to: (Round your intermediate calculations to 2 decimal places.) A) $5,042.00 B) $4,584.00 C) $3,820.00 D) $764.00

answer: B Explanation: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $113,400 + ($1.60 per machine-hour × 18,000 machine-hours) = $113,400 +$28,800 = $142,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $142,200 ÷ 18,000 machine-hours = $7.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.90 per machine-hour × 60 machine-hours = $474 Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $64,400 + ($3.90 per direct labor-hour × 7,000 direct labor-hours) = $64,400 + $27,300 = $91,700 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $91,700 ÷ 7,000 direct labor-hours = $13.10 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.10 per direct labor-hour × 60 direct labor-hours = $786 Milling Customizing Total Direct materials $ 655 $ 305 $ 960 Direct labor $ 400 $ 1,200 1,600 Manufacturing overhead applied $ 474 $ 786 1,260 Total cost of Job A319 $ 3,820 Total cost of Job A319 $ 3,820.00 Markup ($3,820.00 × 20%) 764.00 Selling price $ 4,584.00 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

186) Janicki Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 23,400 $ 28,200 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job A Job J Direct materials $ 12,000 $ 7,700 Direct labor cost $ 20,700 $ 6,400 Machining machine-hours 700 300 Customizing machine-hours 3,600 5,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job J is closest to: (Round your intermediate calculations to 2 decimal places.) A) $71,983 B) $65,439 C) $43,626 D) $21,813

answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 4,800 Estimated variable manufacturing overhead ($1.10 per MH × 1,000 MHs) 1,100 Estimated total manufacturing overhead cost $ 5,900 Customizing Estimated fixed manufacturing overhead $ 23,400 Estimated variable manufacturing overhead ($2.50 per MH × 9,000 MHs) 22,500 Estimated total manufacturing overhead cost $ 45,900 The second step is to combine the estimated manufacturing overhead costs in the two departments ($5,900 + $45,900 = $51,800) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 51,800 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.18 per MH The overhead applied to Job J is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.18 per MH × (300 MHs + 5,400 MHs) = $5.18 per MH × (5,700 MHs) = $29,526 Job J's manufacturing cost: Direct materials $ 7,700 Direct labor cost 6,400 Manufacturing overhead applied 29,526 Total manufacturing cost $ 43,626 The selling price for Job J: Total manufacturing cost $ 43,626 Markup (50%) 21,813 Selling price $ 65,439 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

161) Halbur Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 6,000 4,000 10,000 Estimated total fixed manufacturing overhead cost $ 33,600 $ 10,000 $ 43,600 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.80 During the most recent month, the company started and completed two jobs—Job C and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job C Job J Direct materials $ 11,300 $ 8,100 Direct labor cost $ 18,500 $ 6,300 Machining machine-hours 4,100 1,900 Customizing machine-hours 1,600 2,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job C is closest to: (Round your intermediate calculations to 2 decimal places.) A) $18,500 B) $67,192 C) $11,300 D) $37,392

answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 33,600 Estimated variable manufacturing overhead ($1.80 per MH × 6,000 MHs) 10,800 Estimated total manufacturing overhead cost $ 44,400 Customizing Estimated fixed manufacturing overhead $ 10,000 Estimated variable manufacturing overhead ($2.80 per MH × 4,000 MHs) 11,200 Estimated total manufacturing overhead cost $ 21,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($44,400 + $21,200 = $65,600) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 65,600 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.56 per MH The overhead applied to Job C is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.56 per MH × (4,100 MHs + 1,600 MHs) = $6.56 per MH × (5,700 MHs) = $37,392 Job C's manufacturing cost: Direct materials $ 11,300 Direct labor cost 18,500 Manufacturing overhead applied 37,392 Total manufacturing cost $ 67,192 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

120) Nielsen Corporation has two manufacturing departments—Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,700 $ 10,800 $ 15,500 Estimated variable manufacturing overhead cost per MH $ 1.20 $ 2.20 During the most recent month, the company started and completed two jobs—Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job F Job M Direct materials $ 13,000 $ 7,400 Direct labor cost $ 20,400 $ 8,800 Machining machine-hours 700 300 Assembly machine-hours 1,600 2,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job M is closest to: (Round your intermediate calculations to 2 decimal places.) A) $46,154 B) $41,958 C) $29,970 D) $11,988

answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 4,700 Estimated variable manufacturing overhead ($1.20 per MH × 1,000 MHs) 1,200 Estimated total manufacturing overhead cost $ 5,900 Assembly Estimated fixed manufacturing overhead $ 10,800 Estimated variable manufacturing overhead ($2.20 per MH × 4,000 MHs) 8,800 Estimated total manufacturing overhead cost $ 19,600 The second step is to combine the estimated manufacturing overhead costs in the two departments ($5,900 + $19,600 = $25,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 25,500 Estimated total machine hours 5,000 MHs Predetermined overhead rate $ 5.10 per MH The overhead applied to Job M is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.10 per MH × (300 MHs + 2,400 MHs) = $5.10 per MH × (2,700 MHs) = $13,770 Job M's manufacturing cost: Direct materials $ 7,400 Direct labor cost 8,800 Manufacturing overhead applied 13,770 Total manufacturing cost $ 29,970 The selling price for Job M: Total manufacturing cost $ 29,970 Markup (40%) 11,988 Selling price $ 41,958 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

113) Opunui Corporation has two manufacturing departments—Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Finishing Total Estimated total machine-hours (MHs) 4,000 1,000 5,000 Estimated total fixed manufacturing overhead cost $ 19,600 $ 2,400 $ 22,000 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.10 During the most recent month, the company started and completed two jobs—Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials $ 13,600 $ 7,500 Direct labor cost $ 20,700 $ 7,400 Molding machine-hours 2,700 1,300 Finishing machine-hours 400 600 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round your intermediate calculations to 2 decimal places.) A) $51,970 B) $72,758 C) $80,034 D) $20,788

answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $ 19,600 Estimated variable manufacturing overhead ($1.10 per MH × 4,000 MHs) 4,400 Estimated total manufacturing overhead cost $ 24,000 Finishing Estimated fixed manufacturing overhead $ 2,400 Estimated variable manufacturing overhead ($2.10 per MH × 1,000 MHs) 2,100 Estimated total manufacturing overhead cost $ 4,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($24,000 + $4,500 = $28,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 28,500 Estimated total machine hours 5,000 MHs Predetermined overhead rate $ 5.70 per MH The overhead applied to Job A is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.70 per MH × (2,700 MHs + 400 MHs) = $5.70 per MH × (3,100 MHs) = $17,670 Job A's manufacturing cost: Direct materials $ 13,600 Direct labor cost 20,700 Manufacturing overhead applied 17,670 Total manufacturing cost $ 51,970 The selling price for Job A: Total manufacturing cost $ 51,970 Markup (40%) 20,788 Selling price $ 72,758 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

55) Pebbles Corporation has two manufacturing departments—Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 2,000 3,000 5,000 Estimated total fixed manufacturing overhead cost $ 9,800 $ 6,300 $ 16,100 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 2.40 During the most recent month, the company started and completed two jobs—Job A and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job A Job L Direct materials $ 15,400 $ 9,600 Direct labor cost $ 24,900 $ 6,200 Casting machine-hours 1,400 600 Finishing machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job L is closest to: (Round your intermediate calculations to 2 decimal places.) A) $9,600 B) $6,200 C) $28,904 D) $13,104

answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 9,800 Estimated variable manufacturing overhead ($2.00 per MH × 2,000 MHs) 4,000 Estimated total manufacturing overhead cost $ 13,800 Finishing Estimated fixed manufacturing overhead $ 6,300 Estimated variable manufacturing overhead ($2.40 per MH × 3,000 MHs) 7,200 Estimated total manufacturing overhead cost $ 13,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($13,800 + $13,500 = $27,300) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 27,300 Estimated total machine hours 5,000 MHs Predetermined overhead rate $ 5.46 per MH The overhead applied to Job L is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.46 per MH × (600 MHs + 1,800 MHs) = $5.46 per MH × (2,400 MHs) = $13,104 Job L's manufacturing cost: Direct materials $ 9,600 Direct labor cost 6,200 Manufacturing overhead applied 13,104 Total manufacturing cost $ 28,904 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

69) Mahon Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Customizing Machine-hours 18,000 14,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $ 124,200 $ 68,600 Variable manufacturing overhead per machine-hour $ 1.90 Variable manufacturing overhead per direct labor-hour $ 3.80 During the current month the company started and finished Job T138. The following data were recorded for this job: Job T138: Casting Customizing Machine-hours 70 30 Direct labor-hours 10 60 The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $588.00 B) $95,200.00 C) $816.00 D) $228.00

answer: C Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $68,600 + ($3.80 per direct labor-hour × 7,000 direct labor-hours) = $68,600 + $26,600 = $95,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $95,200 ÷ 7,000 direct labor-hours = $13.60 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.60 per direct labor-hour × 60 direct labor-hours = $816 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

223) Kroeker Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 17,000 12,000 Direct labor-hours 1,000 9,000 Total fixed manufacturing overhead cost $ 112,200 $ 81,000 Variable manufacturing overhead per machine-hour $ 1.70 Variable manufacturing overhead per direct labor-hour $ 4.30 During the current month the company started and finished Job T898. The following data were recorded for this job: Job T898: Milling Customizing Machine-hours 80 30 Direct labor-hours 20 50 The amount of overhead applied in the Customizing Department to Job T898 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $450.00 B) $119,700.00 C) $665.00 D) $215.00

answer: C Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $81,000 + ($4.30 per direct labor-hour × 9,000 direct labor-hours) = $81,000 + $38,700 = $119,700 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $119,700 ÷ 9,000 direct labor-hours = $13.30 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.30 per direct labor-hour × 50 direct labor-hours = $665 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

135) Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $675 Direct labor cost $1,050 If the company marks up its unit product costs by 40% then the selling price for a unit in Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $81.60 B) $305.60 C) $285.60 D) $241.50

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 30,000 machine-hours = $10.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.50 per machine-hour × 30 machine-hours = $315 Direct materials $ 675 Direct labor 1,050 Manufacturing overhead applied 315 Total cost of Job T687 $ 2,040 Total cost of Job T687 (a) $2,040 Number of units (b) 10 Unit product cost (a) ÷ (b) $204.00 Unit product cost for Job T687 $ 204.00 Markup (40% × $204.00) 81.60 Selling price $ 285.60 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

178) Hickingbottom Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 17,000 15,000 Direct labor-hours 1,000 7,000 Total fixed manufacturing overhead cost $ 96,900 $ 65,800 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 3.60 During the current month the company started and finished Job M381. The following data were recorded for this job: Job M381: Forming Finishing Machine-hours 80 30 Direct labor-hours 30 40 Direct materials $ 840 $ 350 Direct labor cost $ 750 $ 1,000 The total job cost for Job M381 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $2,206 B) $616 C) $4,076 D) $1,870

answer: C Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $96,900 + ($2.00 per machine-hour × 17,000 machine-hours) = $96,900 +$34,000 = $130,900 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $130,900 ÷ 17,000 machine-hours = $7.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.70 per machine-hour × 80 machine-hours = $616 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $65,800 + ($3.60 per direct labor-hour × 7,000 direct labor-hours) = $65,800 + $25,200 = $91,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $91,000 ÷ 7,000 direct labor-hours = $13.00 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.00 per direct labor-hour × 40 direct labor-hours = $520 Forming Finishing Total Direct materials $ 840 $ 350 $ 1,190 Direct labor $ 750 $ 1,000 1,750 Manufacturing overhead applied $ 616 $ 520 1,136 Total cost of Job M381 $ 4,076 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

68) Malakan Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 18,000 11,000 Direct labor-hours 2,000 9,000 Total fixed manufacturing overhead cost $ 102,600 $ 96,300 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.90 During the current month the company started and finished Job K368. The following data were recorded for this job: Job K368: Machining Finishing Machine-hours 80 30 Direct labor-hours 20 40 The amount of overhead applied in the Machining Department to Job K368 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $856.00 B) $168.00 C) $624.00 D) $140,400.00

answer: C Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,600 + ($2.10 per machine-hour × 18,000 machine-hours) = $102,600 + $37,800 = $140,400 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $140,400 ÷ 18,000 machine-hours = $7.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.80 per machine-hour × 80 machine-hours = $624 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

240) Quiet Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 40,000 machine-hours, total fixed manufacturing overhead cost of $152,000, and a variable manufacturing overhead rate of $3.10 per machine-hour. Required: Calculate the estimated total manufacturing overhead for the year.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $152,000 + ($3.10 per machine-hour × 40,000 machine-hours) = $152,000 + $124,000 = $276,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

184) Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 12,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 136,800 $ 69,600 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.20 During the current month the company started and finished Job K928. The following data were recorded for this job: Job K928: Machining Finishing Machine-hours 90 10 Direct labor-hours 30 50 Direct materials $ 775 $ 415 Direct labor cost $ 630 $ 1,050 If the company marks up its manufacturing costs by 20% then the selling price for Job K928 would be closest to: (Round your intermediate calculations to 2 decimal places.) A) $4,275.00 B) $5,643.00 C) $5,130.00 D) $855.00

answer: C Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $136,800 + ($1.80 per machine-hour × 19,000 machine-hours) = $136,800 + $34,200 = $171,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.00 per machine-hour × 90 machine-hours = $810 Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $69,600 + ($3.20 per direct labor-hour × 8,000 direct labor-hours) = $69,600 + $25,600 = $95,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $95,200 ÷ 8,000 direct labor-hours = $11.90 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.90 per direct labor-hour × 50 direct labor-hours = $595 Machining Finishing Total Direct materials $ 775 $ 415 $ 1,190 Direct labor $ 630 $ 1,050 1,680 Manufacturing overhead applied $ 810 $ 595 1,405 Total cost of Job K928 $ 4,275 Total cost of Job K928 $ 4,275.00 Markup ($4,275.00 × 20%) 855.00 Selling price $ 5,130.00 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

89) Morataya Corporation has two manufacturing departments—Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 39,200 $ 6,600 $ 45,800 Estimated variable manufacturing overhead cost per MH $ 1.90 $ 2.10 During the most recent month, the company started and completed two jobs—Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job B Job G Direct materials $ 14,800 $ 8,300 Direct labor cost $ 22,000 $ 8,900 Machining machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to: (Round your intermediate calculations to 2 decimal places.) A) $31,392 B) $27,480 C) $39,240 D) $7,848

answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 39,200 Estimated variable manufacturing overhead ($1.90 per MH × 7,000 MHs) 13,300 Estimated total manufacturing overhead cost $ 52,500 Assembly Estimated fixed manufacturing overhead $ 6,600 Estimated variable manufacturing overhead ($2.10 per MH × 3,000 MHs) 6,300 Estimated total manufacturing overhead cost $ 12,900 The second step is to combine the estimated manufacturing overhead costs in the two departments ($52,500 + $12,900 = $65,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 65,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.54 per MH The overhead applied to Job B is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.54 per MH × (4,800 MHs + 1,200 MHs) = $6.54 per MH × (6,000 MHs) = $39,240 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

26) Which of the following statements about using a plantwide overhead rate based on direct labor is correct? A) Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs. B) Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs. C) It is often overly simplistic and incorrect to assume that direct labor-hours is a company's only manufacturing overhead cost driver. D) The labor theory of value ensures that using a plantwide overhead rate based on direct labor will do a reasonably good job of assigning overhead costs to jobs.

answer: C Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

81) Job 910 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 3,193 Direct labor-hours 21 labor-hours Direct labor wage rate $ 12 per labor-hour Machine-hours 166 machine-hours The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $15 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be: A) $3,220 B) $3,760 C) $5,935 D) $3,445

answer: C Explanation: Direct materials $ 3,193 Direct labor (21 direct labor-hours × $12.00 per direct labor-hour) 252 Overhead (166 machine-hours × $15.00 per machine-hour) 2,490 Total manufacturing cost for Job 910 $ 5,935 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

97) Krier Corporation uses a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $738,000 and 30,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $792,000 and 31,500 total direct labor-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A) $831,600 B) $54,000 C) $774,900 D) $738,000

answer: C Explanation: Estimated total fixed manufacturing overhead (a) $ 738,000 Estimated activity level (b) 30,000 Predetermined overhead rate (a) ÷ (b) $ 24.60 Actual activity level 31,500 Manufacturing overhead applied $ 774,900 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

9) If the overhead rate is computed annually based on the actual costs and activity for the year, the manufacturing overhead assigned to any particular job can be computed as soon as the job is completed.

answer: FALSE Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

12) If the allocation base in the predetermined overhead rate does not drive overhead costs, it will nevertheless provide reasonably accurate unit product costs because of the averaging process.

answer: FALSE Difficulty: 1 Easy Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

232) Claybrooks Corporation has two manufacturing departments—Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $ 17,700 $ 5,800 $ 23,500 Estimated variable manufacturing overhead cost per MH $ 1.50 $ 2.20 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to: A) $4.70 B) $7.40 C) $6.48 D) $3.70

answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 17,700 Estimated variable manufacturing overhead ($1.50 per MH × 3,000 MHs) 4,500 Estimated total manufacturing overhead cost $ 22,200 Assembly Estimated fixed manufacturing overhead $ 5,800 Estimated variable manufacturing overhead ($2.20 per MH × 2,000 MHs) 4,400 Estimated total manufacturing overhead cost $ 10,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($22,200 + $10,200 = $32,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 32,400 Estimated total machine hours 5,000 MHs Predetermined overhead rate $ 6.48 per MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

112) Opunui Corporation has two manufacturing departments—Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Finishing Total Estimated total machine-hours (MHs) 4,000 1,000 5,000 Estimated total fixed manufacturing overhead cost $ 19,600 $ 2,400 $ 22,000 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.10 During the most recent month, the company started and completed two jobs—Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials $ 13,600 $ 7,500 Direct labor cost $ 20,700 $ 7,400 Molding machine-hours 2,700 1,300 Finishing machine-hours 400 600 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job M is closest to: (Round your intermediate calculations to 2 decimal places.) A) $10,830 B) $7,400 C) $25,730 D) $7,500

answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $ 19,600 Estimated variable manufacturing overhead ($1.10 per MH × 4,000 MHs) 4,400 Estimated total manufacturing overhead cost $ 24,000 Finishing Estimated fixed manufacturing overhead $ 2,400 Estimated variable manufacturing overhead ($2.10 per MH × 1,000 MHs) 2,100 Estimated total manufacturing overhead cost $ 4,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($24,000 + $4,500 = $28,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 28,500 Estimated total machine hours 5,000 MHs Predetermined overhead rate $ 5.70 per MH The overhead applied to Job M is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.70 per MH × (1,300 MHs + 600 MHs) = $5.70 per MH × (1,900 MHs) = $10,830 Job M's manufacturing cost: Direct materials $ 7,500 Direct labor cost 7,400 Manufacturing overhead applied 10,830 Total manufacturing cost $ 25,730 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

214) Ahlheim Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 16,000 15,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 102,400 $ 55,200 Variable manufacturing overhead per machine-hour $ 2.30 Variable manufacturing overhead per direct labor-hour $ 4.50 During the current month the company started and finished Job T924. The following data were recorded for this job: Job T924: Forming Assembly Machine-hours 70 20 Direct labor-hours 30 40 Direct materials $ 870 $ 385 Direct labor cost $ 630 $ 840 The estimated total manufacturing overhead for the Assembly Department is closest to: A) $27,000 B) $55,200 C) $82,200 D) $47,700

answer: C Explanation: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $55,200 + ($4.50 per direct labor-hour × 6,000 direct labor-hours) = $55,200 + $27,000 = $82,200 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

210) Stoke Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 20,000 15,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $ 138,000 $ 58,100 Variable manufacturing overhead per machine-hour $ 2.30 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job A460. The following data were recorded for this job: Job A460: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 50 The amount of overhead applied in the Assembly Department to Job A460 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $415.00 B) $150.00 C) $565.00 D) $79,100.00

answer: C Explanation: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $58,100 + ($3.00 per direct labor-hour × 7,000 direct labor-hours) = $58,100 + $21,000 = $79,100 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $79,100 ÷ 7,000 direct labor-hours = $11.30 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.30 per direct labor-hour × 50 direct labor-hours = $565 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

4) The formula for computing the predetermined overhead rate is: Predetermined overhead rate = Estimated total amount of the allocation base ÷ Estimated total manufacturing overhead cost

answer: FALSE Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking;

4) The formula for computing the predetermined overhead rate is: Predetermined overhead rate = Estimated total amount of the allocation base ÷ Estimated total manufacturing overhead cost

answer: FALSE Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 5) Generally speaking, when going through the process of computing a predetermined overhead rate, the estimated total manufacturing overhead cost is determined before estimating the amount of the allocation base. --answer: FALSE Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 6) If a job is not completed at year end, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used. --answer: FALSE Difficulty: 2 Medium Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 7) Actual overhead costs are not assigned to jobs in a job costing system. --answer: TRUE Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 8) The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job. --answer: FALSE Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 9) If the overhead rate is computed annually based on the actual costs and activity for the year, the manufacturing overhead assigned to any particular job can be computed as soon as the job is completed. --answer: FALSE Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 10) Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job. --answer: FALSE Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 11) In a job-order cost system, indirect labor is assigned to a job using information from the employee time ticket. --answer: FALSE Difficulty: 3 Hard Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 12) If the allocation base in the predetermined overhead rate does not drive overhead costs, it will nevertheless provide reasonably accurate unit product costs because of the averaging process. --answer: FALSE Difficulty: 1 Easy Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 13) A job cost sheet is used to record how much a customer pays for the job once the job is completed. --answer: FALSE Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 14) In a job-order costing system, costs are traced to individual units of product. The sum total of such traced costs is called the unit product cost. --answer: FALSE Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 15) The fact that one department may be labor intensive while another department is machine intensive explains in part why multiple predetermined overhead rates are often used in larger companies. --answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 16) A company will improve job cost accuracy by using multiple overhead rates even if it cannot identify more than one overhead cost driver. --answer: FALSE Difficulty: 2 Medium Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 17) The appeal of using multiple departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs. --answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 18) The costs attached to products that have not been sold are included in ending inventory on the balance sheet. --answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 19) In absorption costing, nonmanufacturing costs are assigned to units of product. --answer: FALSE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 20) An employee time ticket is used to record points that are earned by employees based on the hours they worked that can be used to pay for coffee, food in the cafeteria, and even in some cases for vacation travel. --answer: FALSE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 21) A bill of materials is a document that lists the type and quantity of each type of direct material needed to complete a unit of product. --answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 22) Most countries require some form of absorption costing for external reports. --answer: TRUE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 23) In a job-order costing system that is based on machine-hours, which of the following formulas is correct? A) Predetermined overhead rate = Actual manufacturing overhead ÷ Actual machine-hours B) Predetermined overhead rate = Actual manufacturing overhead ÷ Estimated machine-hours C) Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours D) Predetermined overhead rate = Estimated manufacturing overhead ÷ Actual machine-hours --answer: C Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 24) Which of the following is the correct formula to compute the predetermined overhead rate? A) Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs B) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base C) Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base D) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base. --answer: B Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 25) Assigning manufacturing overhead to a specific job is complicated by all of the below except: A) Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a particular job. B) Manufacturing overhead is incurred only to support some jobs. C) Manufacturing overhead consists of both variable and fixed costs. D) The average cost of actual fixed manufacturing overhead expenses will vary depending on how many units are produced in a period. --answer: B Difficulty: 2 Medium Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 26) Which of the following statements about using a plantwide overhead rate based on direct labor is correct? A) Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs. B) Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs. C) It is often overly simplistic and incorrect to assume that direct labor-hours is a company's only manufacturing overhead cost driver. D) The labor theory of value ensures that using a plantwide overhead rate based on direct labor will do a reasonably good job of assigning overhead costs to jobs. --answer: C Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 27) Which of the following would usually be found on a job cost sheet under a normal cost system? Actual direct material cost Actual manufacturing overhead cost A) Yes Yes B) Yes No C) No Yes D) No No A) Choice A B) Choice B C) Choice C D) Choice D --answer: B Difficulty: 1 Easy Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 28) Which of the following statements is NOT correct concerning multiple overhead rate systems? A) A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. B) A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. C) A company may choose to create a separate overhead rate for each of its production departments. D) In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours. --answer: D Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 29) Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials $ 6,000 Direct labor $ 20,000 Rent on factory building $ 15,000 Sales salaries $ 25,000 Depreciation on factory equipment $ 8,000 Indirect labor $ 12,000 Production supervisor's salary $ 15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $2.50 per direct labor-hour B) $2.79 per direct labor-hour C) $3.00 per direct labor-hour D) $4.00 per direct labor-hour --answer: A Explanation: Rent on factory building $ 15,000 Depreciation on factory equipment 8,000 Indirect labor 12,000 Production supervisor's salary 15,000 Manufacturing overhead $ 50,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $50,000 ÷ 20,000 direct labor-hours = $2.50 per direct labor-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 30) The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates: Dept. A Dept. B Direct labor cost $ 60,000 $ 40,000 Manufacturing overhead $ 90,000 $ 45,000 Direct labor-hours 6,000 9,000 Machine-hours 2,000 15,000 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? A) 67% and $3.00 B) 150% and $5.00 C) 150% and $3.00 D) 67% and $5.00 --answer: C Explanation: Dept. A Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $90,000 ÷ $60,000 = 150% of direct labor cost Dept. B Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $45,000 ÷ 15,000 machine-hours = $3.00 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 31) Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to: A) $10.37 B) $12.10 C) $11.10 D) $11.30 --answer: B Explanation: Estimated total fixed manufacturing overhead (a) $ 121,000 Estimated activity level (b) 10,000 Predetermined overhead rate (a) ÷ (b) $ 12.10 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 32) Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Direct materials $ 1,000 Direct labor $ 3,000 Sales commissions $ 4,000 Salary of production supervisor $ 2,000 Indirect materials $ 400 Advertising expense $ 800 Rent on factory equipment $ 1,000 Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $6.80 per machine-hour B) $6.00 per machine-hour C) $3.00 per machine-hour D) $3.40 per machine-hour --answer: D Explanation: Salary of production supervisor $ 2,000 Indirect materials 400 Rent on factory equipment 1,000 Total manufacturing overhead $ 3,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $3,400 ÷ 1,000 machine-hours = $3.40 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 33) Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000 machine-hours Actual total fixed manufacturing overhead $ 487,000 Actual activity level 27,400 machine-hours The predetermined overhead rate per machine-hour would be closest to: A) $17.80 B) $19.49 C) $16.23 D) $17.77 --answer: A Explanation: Estimated total fixed manufacturing overhead (a) $534,000 Estimated activity level (b) 30,000 Predetermined overhead rate (a) ÷ (b $17.80 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 34) Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 36,000 Estimated variable manufacturing overhead $ 3.01 per machine-hour Estimated total fixed manufacturing overhead $ 1,058,040 The predetermined overhead rate for the recently completed year was closest to: A) $29.39 per machine-hour B) $32.40 per machine-hour C) $32.81 per machine-hour D) $3.01 per machine-hour --answer: B Explanation: Estimated total manufacturing overhead = $1,058,040 + ($3.01 per machine-hour × 36,000 machine-hours) = $1,166,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,166,400 ÷ 36,000 machine-hours = $32.40 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 35) Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was $7.38 per machine-hour and the estimated total fixed manufacturing overhead was $2,347,090. The predetermined overhead rate for the recently completed year was closest to: A) $37.09 per machine-hour B) $36.07 per machine-hour C) $7.38 per machine-hour D) $29.71 per machine-hour --answer: A Explanation: Estimated total manufacturing overhead = $2,347,090 + ($7.38 per machine-hour × 79,000 machine-hours) = $2,930,110 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $2,930,110 ÷ 79,000 machine-hours = $37.09 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 36) Dearden Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $144,000, variable manufacturing overhead of $2.00 per machine-hour, and 60,000 machine-hours. The predetermined overhead rate is closest to: A) $2.40 per machine-hour B) $6.40 per machine-hour C) $4.40 per machine-hour D) $2.00 per machine-hour --answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $144,000 + ($2.00 per machine-hour × 60,000 machine-hours) = $144,000 + $120,000 = $264,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $264,000 ÷ 60,000 machine-hours = $4.40 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 37) Longobardi Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 46,000 labor-hours. The estimated variable manufacturing overhead was $6.25 per labor-hour and the estimated total fixed manufacturing overhead was $1,026,260. The actual labor-hours for the year turned out to be 41,200 labor-hours. The predetermined overhead rate for the recently completed year was closest to: A) $28.56 per labor-hour B) $22.31 per labor-hour C) $6.25 per labor-hour D) $31.16 per labor-hour --answer: A Explanation: Estimated total manufacturing overhead = $1,026,260 + ($6.25 per labor-hour × 46,000 labor-hours) = $1,313,760 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,313,760 ÷ 46,000 labor-hours = $28.56 per labor-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 38) Valvano Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $440,000, variable manufacturing overhead of $2.20 per machine-hour, and 50,000 machine-hours. The estimated total manufacturing overhead is closest to: A) $440,000 B) $110,000 C) $440,002 D) $550,000 --answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $440,000 + ($2.20 per machine-hour × 50,000 machine-hours) = $440,000 + $110,000 = $550,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 39) Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 39,000 Estimated variable manufacturing overhead $ 6.76 per machine-hour Estimated total fixed manufacturing overhead $ 794,430 Actual machine-hours for the year 42,700 The predetermined overhead rate for the recently completed year was closest to: A) $25.37 per machine-hour B) $27.13 per machine-hour C) $6.76 per machine-hour D) $20.37 per machine-hour --answer: B Explanation: Estimated total manufacturing overhead =$794,430 + ($6.76 per machine-hour × 39,000 machine-hours) = $1,058,070 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,058,070 ÷ 39,000 machine-hours = $27.13 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 40) Steele Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. Steele Corporation has provided the following estimated costs for next year: Direct materials $ 20,000 Direct labor $ 60,000 Sales commissions $ 80,000 Salary of production supervisor $ 40,000 Indirect materials $ 8,000 Advertising expense $ 16,000 Rent on factory equipment $ 20,000 Steele estimates that 10,000 direct labor-hours and 16,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $4.25 B) $8.00 C) $9.00 D) $10.25 --answer: A Explanation: Salary of production supervisor $ 40,000 Indirect materials 8,000 Rent on factory equipment 20,000 Manufacturing overhead $ 68,000 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base Predetermined overhead rate = $68,000 ÷ 16,000 machine-hours = $4.25 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 41) Helland Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 30,000 Total fixed manufacturing overhead cost $ 189,000 Variable manufacturing overhead per direct labor-hour $ 2.50 The predetermined overhead rate is closest to: A) $2.50 per direct labor-hour B) $11.30 per direct labor-hour C) $6.30 per direct labor-hour D) $8.80 per direct labor-hour --answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $189,000 + ($2.50 per direct labor-hour × 30,000 direct labor-hours) = $189,000 + $75,000 = $264,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $264,000 ÷ 30,000 direct labor-hours = $8.80 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 42) Laflame Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $ 357,000 Variable manufacturing overhead per machine-hour $ 3.90 The estimated total manufacturing overhead is closest to: A) $273,000 B) $630,000 C) $357,004 D) $357,000 --answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $357,000 + ($3.90 per machine-hour × 70,000 machine-hours) = $357,000 + $273,000 = $630,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 43) Almaraz Corporation has two manufacturing departments—Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Finishing Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 40,600 $ 8,100 $ 48,700 Estimated variable manufacturing overhead cost per MH $ 1.30 $ 2.80 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to: A) $6.62 B) $4.87 C) $4.10 D) $7.10 --answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 40,600 Estimated variable manufacturing overhead ($1.30 per MH × 7,000 MHs) 9,100 Estimated total manufacturing overhead cost $ 49,700 Finishing Estimated fixed manufacturing overhead $ 8,100 Estimated variable manufacturing overhead ($2.80 per MH × 3,000 MHs) 8,400 Estimated total manufacturing overhead cost $ 16,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($49,700 + $16,500 = $66,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 66,200 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.62 per MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 44) Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A) $464,120 B) $492,000 C) $487,703 D) $25,000 --answer: A Explanation: Estimated total fixed manufacturing overhead (a) $ 492,000 Estimated activity level (b) 30,000 Predetermined overhead rate (a) ÷ (b) $ 16.40 Actual activity level 28,300 Manufacturing overhead applied $ 464,120 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 45) Beat Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 40,000 Total fixed manufacturing overhead cost $ 344,000 Variable manufacturing overhead per machine-hour $ 3.90 Recently, Job M759 was completed. It required 60 machine-hours. The amount of overhead applied to Job M759 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $750 B) $516 C) $984 D) $234 --answer: A Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $344,000 + ($3.90 per machine-hour × 40,000 machine-hours) = $344,000 + $156,000 = $500,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $500,000 ÷ 40,000 machine-hours = $12.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.50 per machine-hour × 60 machine-hours = $750 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 46) Mundorf Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 9,000 1,000 10,000 Estimated total fixed manufacturing overhead cost $ 52,200 $ 2,400 $ 54,600 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 2.10 During the most recent month, the company started and completed two jobs—Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job B Job H Forming machine-hours 6,100 2,900 Assembly machine-hours 400 600 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to: A) $48,555 B) $35,490 C) $2,988 D) $45,567 --answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 52,200 Estimated variable manufacturing overhead ($2.00 per MH × 9,000 MHs) 18,000 Estimated total manufacturing overhead cost $ 70,200 Assembly Estimated fixed manufacturing overhead $ 2,400 Estimated variable manufacturing overhead ($2.10 per MH × 1,000 MHs) 2,100 Estimated total manufacturing overhead cost $ 4,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($70,200 + $4,500 = $74,700) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 74,700 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 7.47 per MH The overhead applied to Job B is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $7.47 per MH × (6,100 MHs + 400 MHs) = $7.47 per MH × (6,500 MHs) = $48,555 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 47) Parido Corporation has two manufacturing departments—Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 8,000 2,000 10,000 Estimated total fixed manufacturing overhead cost $ 44,000 $ 4,200 $ 48,200 Estimated variable manufacturing overhead cost per MH $ 1.90 $ 3.00 During the most recent month, the company started and completed two jobs—Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Casting machine-hours 5,400 2,600 Assembly machine-hours 800 1,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job H is closest to: (Round your intermediate calculations to 2 decimal places.) A) $8,328 B) $26,372 C) $18,316 D) $18,044 --answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 44,000 Estimated variable manufacturing overhead ($1.90 per MH × 8,000 MHs) 15,200 Estimated total manufacturing overhead cost $ 59,200 Assembly Estimated fixed manufacturing overhead $ 4,200 Estimated variable manufacturing overhead ($3.00 per MH × 2,000 MHs) 6000 Estimated total manufacturing overhead cost $ 10,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($59,200 + $10,200 = $69,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 69,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.94 per MH The overhead applied to Job H is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.94 per MH × (2,600 MHs + 1,200 MHs) = $6.94 per MH × (3,800 MHs) = $26,372 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 48) Juanita Corporation uses a job-order costing system and applies overhead on the basis of direct labor cost. At the end of October, Juanita had one job still in process. The job cost sheet for this job contained the following information: Direct materials $ 480 Direct labor $ 150 Manufacturing overhead applied $ 600 An additional $100 of labor was needed in November to complete this job. For this job, how much should Juanita have transferred to finished goods inventory in November when it was completed? A) $1,330 B) $500 C) $1,230 D) $1,730 --answer: D Explanation: Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $600 = Predetermined overhead rate × $150 Predetermined overhead rate = $600 ÷ $150 = 4.0 Direct materials $ 480 Direct labor ($150 + $100) 250 Manufacturing overhead applied (4.0 × $250) 1,000 Total product cost $ 1,730 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 49) Carradine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $105,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. The company recently completed Job P233 which required 60 machine-hours. The amount of overhead applied to Job P233 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $90 B) $270 C) $450 D) $180 --answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $105,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $105,000 + $210,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 70,000 machine-hours = $4.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.50 per machine-hour × 60 machine-hours = $270 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 50) Fusaro Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 684,000 Estimated activity level from the beginning of the year 40,000 machine-hours Actual total fixed manufacturing overhead $ 616,000 Actual activity level 37,700 machine-hours The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A) $644,670 B) $684,000 C) $68,000 D) $580,580 --answer: A Explanation: Estimated total fixed manufacturing overhead (a) $ 684,000 Estimated activity level (b) 40,000 Predetermined overhead rate (a) ÷ (b) $ 17.10 Actual activity level 37,700 Manufacturing overhead applied $ 644,670 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 51) Koelsch Corporation has two manufacturing departments—Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,000 $ 25,200 $ 29,200 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 3.00 During the most recent month, the company started and completed two jobs—Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job F Job K Direct materials $ 12,300 $ 8,400 Direct labor cost $ 18,200 $ 6,800 Molding machine-hours 700 300 Customizing machine-hours 3,600 5,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job K is closest to: (Round your intermediate calculations to 2 decimal places.) A) $72,561 B) $79,817 C) $24,187 D) $48,374 --answer: A Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead $ 4,000 Estimated variable manufacturing overhead ($2.00 per MH × 1,000 MHs) 2,000 Estimated total manufacturing overhead cost $ 6,000 Customizing Estimated fixed manufacturing overhead $ 25,200 Estimated variable manufacturing overhead ($3.00 per MH × 9,000 MHs) 27,000 Estimated total manufacturing overhead cost $ 52,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($6,000 + $52,200 = $58,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 58,200 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.82 per MH The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.82 per MH × (300 MHs + 5,400 MHs) = $5.82 per MH × (5,700 MHs) = $33,174 Job K's manufacturing cost: Direct materials $ 8,400 Direct labor cost 6,800 Manufacturing overhead applied 33,174 Total manufacturing cost $ 48,374 The selling price for Job K: Total manufacturing cost $ 48,374 Markup (50%) 24,187 Selling price $ 72,561 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 52) Thach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $665,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. Recently, Job T321 was completed with the following characteristics: Number of units in the job 30 Total machine-hours 90 Direct materials $ 630 Direct labor cost $ 2,880 The unit product cost for Job T321 is closest to: A) $117.00 B) $58.50 C) $154.50 D) $51.50 --answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $665,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $665,000 + $210,000 = $875,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $875,000 ÷ 70,000 machine-hours = $12.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.50 per machine-hour × 90 machine-hours = $1,125 Direct materials $ 630 Direct labor 2,880 Manufacturing overhead applied 1,125 Total cost of Job T321 $ 4,635 Total cost of Job T321 (a) $ 4,635 Number of units (b) 30 Unit product cost (a) ÷ (b) $ 154.50 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 53) Tancredi Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 22,000 $ 11,500 $ 33,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 3.00 During the most recent month, the company started and completed two jobs—Job E and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job E Job J Direct materials $ 12,800 $ 7,000 Direct labor cost $ 17,600 $ 7,700 Machining machine-hours 3,400 1,600 Customizing machine-hours 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. If both jobs are sold during the month, the company's cost of goods sold for the month would be closest to: (Round your intermediate calculations to 2 decimal places.) A) $61,450 B) $41,150 C) $110,808 D) $102,600 --answer: D Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 22,000 Estimated variable manufacturing overhead ($1.80 per MH × 5,000 MHs) 9,000 Estimated total manufacturing overhead cost $ 31,000 Customizing Estimated fixed manufacturing overhead $ 11,500 Estimated variable manufacturing overhead ($3.00 per MH × 5,000 MHs) 15,000 Estimated total manufacturing overhead cost $ 26,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($31,000 + $26,500 = $57,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 57,500 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.75 per MH The overhead applied to Job E is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.75 per MH × (3,400 MHs + 2,000 MHs) = $5.75 per MH × (5,400 MHs) = $31,050 Job E's manufacturing cost: Direct materials $ 12,800 Direct labor cost 17,600 Manufacturing overhead applied 31,050 Total manufacturing cost $ 61,450 The overhead applied to Job J is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.75 per MH × (1,600 MHs + 3,000 MHs) = $5.75 per MH × (4,600 MHs) = $26,450 Job J's manufacturing cost: Direct materials $ 7,000 Direct labor cost 7,700 Manufacturing overhead applied 26,450 Total manufacturing cost $ 41,150 Total manufacturing cost assigned to Job E $ 61,450 Total manufacturing cost assigned to Job J 41,150 Cost of goods sold $ 102,600 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 54) Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 70,000 Total fixed manufacturing overhead cost $ 511,000 Variable manufacturing overhead per direct labor-hour $ 2.10 Recently, Job K913 was completed with the following characteristics: Total direct labor-hours 150 Direct materials $ 705 Direct labor cost $ 4,650 The total job cost for Job K913 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $6,060 B) $2,115 C) $6,765 D) $5,355 --answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $511,000 + ($2.10 per direct labor-hour × 70,000 direct labor-hours) = $511,000 + $147,000 = $658,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $658,000 ÷ 70,000 direct labor-hours = $9.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.40 per direct labor-hour × 150 direct labor-hours = $1,410 Direct materials $ 705 Direct labor cost 4,650 Manufacturing overhead applied 1,410 Total cost of Job K913 $ 6,765 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 55) Pebbles Corporation has two manufacturing departments—Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 2,000 3,000 5,000 Estimated total fixed manufacturing overhead cost $ 9,800 $ 6,300 $ 16,100 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 2.40 During the most recent month, the company started and completed two jobs—Job A and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job A Job L Direct materials $ 15,400 $ 9,600 Direct labor cost $ 24,900 $ 6,200 Casting machine-hours 1,400 600 Finishing machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job L is closest to: (Round your intermediate calculations to 2 decimal places.) A) $9,600 B) $6,200 C) $28,904 D) $13,104 --answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead $ 9,800 Estimated variable manufacturing overhead ($2.00 per MH × 2,000 MHs) 4,000 Estimated total manufacturing overhead cost $ 13,800 Finishing Estimated fixed manufacturing overhead $ 6,300 Estimated variable manufacturing overhead ($2.40 per MH × 3,000 MHs) 7,200 Estimated total manufacturing overhead cost $ 13,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($13,800 + $13,500 = $27,300) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 27,300 Estimated total machine hours 5,000 MHs Predetermined overhead rate $ 5.46 per MH The overhead applied to Job L is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.46 per MH × (600 MHs + 1,800 MHs) = $5.46 per MH × (2,400 MHs) = $13,104 Job L's manufacturing cost: Direct materials $ 9,600 Direct labor cost 6,200 Manufacturing overhead applied 13,104 Total manufacturing cost $ 28,904 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 56) Stockmaster Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 27,000 $ 10,500 $ 37,500 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.80 During the most recent month, the company started and completed two jobs—Job C and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job C Job H Direct materials $ 11,200 $ 7,500 Direct labor cost $ 21,000 $ 7,800 Forming machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job C is closest to: (Round your intermediate calculations to 2 decimal places.) A) $96,989 B) $88,172 C) $25,192 D) $62,980 --answer: B Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 27,000 Estimated variable manufacturing overhead ($1.10 per MH × 5,000 MHs) 5,500 Estimated total manufacturing overhead cost $ 32,500 Assembly Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.80 per MH × 5,000 MHs) 14,000 Estimated total manufacturing overhead cost $ 24,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($32,500 + $24,500 = $57,000) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 57,000 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.70 per MH The overhead applied to Job C is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.70 per MH × (3,400 MHs + 2,000 MHs) = $5.70 per MH × (5,400 MHs) = $30,780 Job C's manufacturing cost: Direct materials $ 11,200 Direct labor cost 21,000 Manufacturing overhead applied 30,780 Total manufacturing cost $ 62,980 The selling price for Job C: Total manufacturing cost $ 62,980 Markup (40%) 25,192 Selling price $ 88,172 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 57) Atteberry Corporation has two manufacturing departments—Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Finishing Total Estimated total machine-hours (MHs) 6,000 4,000 10,000 Estimated total fixed manufacturing overhead cost $ 30,000 $ 11,200 $ 41,200 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 2.40 During the most recent month, the company started and completed two jobs—Job E and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job E Job L Direct materials $ 13,400 $ 9,100 Direct labor cost $ 24,500 $ 7,000 Machining machine-hours 4,100 1,900 Finishing machine-hours 1,600 2,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job E is closest to: (Round your intermediate calculations to 2 decimal places.) A) $24,500 B) $35,796 C) $13,400 D) $73,696 --answer: D Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 30,000 Estimated variable manufacturing overhead ($2.00 per MH × 6,000 MHs) 12,000 Estimated total manufacturing overhead cost $ 42,000 Finishing Estimated fixed manufacturing overhead $ 11,200 Estimated variable manufacturing overhead ($2.40 per MH × 4,000 MHs) 9,600 Estimated total manufacturing overhead cost $ 20,800 The second step is to combine the estimated manufacturing overhead costs in the two departments ($42,000 + $20,800 = $62,800) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 62,800 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.28 per MH The overhead applied to Job E is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.28 per MH × (4,100 MHs + 1,600 MHs) = $6.28 per MH × (5,700 MHs) = $35,796 Job E's manufacturing cost: Direct materials $ 13,400 Direct labor cost 24,500 Manufacturing overhead applied 35,796 Total manufacturing cost $ 73,696 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 58) Coates Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $249,000, variable manufacturing overhead of $3.80 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job X784 which was recently completed: Number of units in the job 50 Total machine-hours 250 Direct materials $ 470 Direct labor cost $ 5,500 If the company marks up its unit product costs by 30% then the selling price for a unit in Job X784 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $253.87 B) $233.87 C) $53.97 D) $155.22 --answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $249,000 + ($3.80 per machine-hour × 30,000 machine-hours) = $249,000 + $114,000 = $363,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $363,000 ÷ 30,000 machine-hours = $12.10 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.10 per machine-hour × 250 machine-hours = $3,025 Direct materials $ 470 Direct labor 5,500 Manufacturing overhead applied 3,025 Total cost of Job X784 $ 8,995 Total cost of Job X784 (a) $ 8,995 Number of units (b) 50 Unit product cost (a) ÷ (b) $ 179.90 Unit product cost for Job X784 $ 179.90 Markup (30% × $179.90) 53.97 Selling price $ 233.87 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 59) Sutter Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 10,000 Total fixed manufacturing overhead cost $ 35,000 Variable manufacturing overhead per machine-hour $ 2.20 Recently, Job T369 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 40 Direct materials $ 750 Direct labor cost $ 1,560 If the company marks up its unit product costs by 20% then the selling price for a unit in Job T369 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $324.56 B) $304.56 C) $277.20 D) $50.76 --answer: B Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $35,000 + ($2.20 per machine-hour × 10,000 machine-hours) = $35,000 + $22,000 = $57,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $57,000 ÷ 10,000 machine-hours = $5.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.70 per machine-hour × 40 machine-hours = $228 Direct materials $ 750 Direct labor 1,560 Manufacturing overhead applied 228 Total cost of Job T369 $ 2,538 Total cost of Job T369 (a) $ 2,538 Number of units (b) 10 Unit product cost (a) ÷ (b) $ 253.80 Unit product cost for Job T369 $ 253.80 Markup (20% × $253.80) 50.76 Selling price $ 304.56 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking; FN Measurement 60) Doakes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 60,000 Total fixed manufacturing overhead cost $ 378,000 Variable manufacturing overhead per direct labor-hour $ 2.20 Recently, Job M843 was completed with the following characteristics: Number of units in the job 60 Total direct labor-hours 120 Direct materials $ 630 Direct labor cost $ 2,400

76) Camm Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $ 12,600 $ 4,600 $ 17,200 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.50 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Assembly Department is closest to: A) $2.50 B) $2.30 C) $4.80 D) $5.46

answer: C Explanation: Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 4,600 Estimated variable manufacturing overhead ($2.50 per MH × 2,000 MHs) 5,000 Estimated total manufacturing overhead cost (a) $ 9,600 Estimated total machine-hours (b) 2,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 4.80 /MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

234) Claybrooks Corporation has two manufacturing departments—Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $ 17,700 $ 5,800 $ 23,500 Estimated variable manufacturing overhead cost per MH $ 1.50 $ 2.20 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Assembly Department is closest to: A) $2.90 B) $6.48 C) $5.10 D) $2.20

answer: C Explanation: Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 5,800 Estimated variable manufacturing overhead ($2.20 per MH × 2,000 MHs) 4,400 Estimated total manufacturing overhead cost (a) $ 10,200 Estimated total machine-hours (b) 2,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.10 /MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

226) Garza Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Customizing Machine-hours 20,000 13,000 Direct labor-hours 1,000 7,000 Total fixed manufacturing overhead cost $ 152,000 $ 68,600 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 4.30 The estimated total manufacturing overhead for the Customizing Department is closest to: A) $54,110 B) $30,100 C) $98,700 D) $68,600

answer: C Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $68,600 + ($4.30 per direct labor-hour × 7,000 direct labor-hours) = $68,600 + $30,100 = $98,700 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

82) Grib Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The predetermined overhead rates for the year are 200% of direct labor cost for Department A and 50% of direct labor cost for Department B. Job 436, started and completed during the year, was charged with the following costs: Dept. A Dept. B Direct materials $ 50,000 $ 10,000 Direct labor ? $ 60,000 Manufacturing overhead $ 80,000 ? The total manufacturing cost assigned to Job 436 was: A) $360,000 B) $390,000 C) $270,000 D) $480,000

answer: C Explanation: Department A manufacturing overhead = Predetermined overhead rate × Amount of the allocation base incurred $80,000 = 200% × Direct labor Direct labor = $40,000 Department B manufacturing overhead = Predetermined overhead rate × Amount of the allocation base incurred = 50% × $60,000 = $30,000 Dept. A Dept. B Total Direct materials $ 50,000 $ 10,000 Direct labor 40,000 60,000 Manufacturing overhead 80,000 30,000 Total product cost $ 170,000 $ 100,000 $ 270,000 Difficulty: 3 Hard Topic: Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

30) The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates: Dept. A Dept. B Direct labor cost $ 60,000 $ 40,000 Manufacturing overhead $ 90,000 $ 45,000 Direct labor-hours 6,000 9,000 Machine-hours 2,000 15,000 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? A) 67% and $3.00 B) 150% and $5.00 C) 150% and $3.00 D) 67% and $5.00

answer: C Explanation: Dept. A Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $90,000 ÷ $60,000 = 150% of direct labor cost Dept. B Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $45,000 ÷ 15,000 machine-hours = $3.00 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

5) Generally speaking, when going through the process of computing a predetermined overhead rate, the estimated total manufacturing overhead cost is determined before estimating the amount of the allocation base.

answer: FALSE Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

106) Branin Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $160,000, variable manufacturing overhead of $3.40 per direct labor-hour, and 80,000 direct labor-hours. The company has provided the following data concerning Job A578 which was recently completed: Total direct labor-hours 250 Direct materials $ 715 Direct labor cost $ 9,000 The estimated total manufacturing overhead is closest to: A) $272,000 B) $160,000 C) $432,000 D) $160,003

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $160,000 + ($3.40 per direct labor-hour × 80,000 direct labor-hours) = $160,000 + $272,000 = $432,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

157) Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,160 The total job cost for Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $2,660 B) $3,104 C) $3,604 D) $1,444

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $237,000 + ($3.90 per machine-hour × 30,000 machine-hours) = $237,000 + $117,000 = $354,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $354,000 ÷ 30,000 machine-hours = $11.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.80 per machine-hour × 80 machine-hours = $944 Direct materials $ 500 Direct labor 2,160 Manufacturing overhead applied 944 Total cost of Job A496 $ 3,604 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

156) Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,160 The amount of overhead applied to Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,256 B) $632 C) $944 D) $312

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $237,000 + ($3.90 per machine-hour × 30,000 machine-hours) = $237,000 + $117,000 = $354,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $354,000 ÷ 30,000 machine-hours = $11.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.80 per machine-hour × 80 machine-hours = $944 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

165) Prather Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 50,000 Total fixed manufacturing overhead cost $ 285,000 Variable manufacturing overhead per direct labor-hour $ 3.80 Recently, Job P513 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 20 Direct materials $ 710 Direct labor cost $ 500 The total job cost for Job P513 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $690 B) $900 C) $1,400 D) $1,210

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $285,000 + ($3.80 per direct labor-hour × 50,000 direct labor-hours) = $285,000 + $190,000 = $475,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $475,000 ÷ 50,000 direct labor-hours = $9.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.50 per direct labor-hour × 20 direct labor-hours = $190 Direct materials $ 710 Direct labor 500 Manufacturing overhead applied 190 Total cost of Job P513 $ 1,400 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

163) Prather Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 50,000 Total fixed manufacturing overhead cost $ 285,000 Variable manufacturing overhead per direct labor-hour $ 3.80 Recently, Job P513 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 20 Direct materials $ 710 Direct labor cost $ 500 The predetermined overhead rate is closest to: A) $13.30 per direct labor-hour B) $3.80 per direct labor-hour C) $9.50 per direct labor-hour D) $5.70 per direct labor-hour

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $285,000 + ($3.80 per direct labor-hour × 50,000 direct labor-hours) = $285,000 + $190,000 = $475,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $475,000 ÷ 50,000 direct labor-hours = $9.50 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

19) In absorption costing, nonmanufacturing costs are assigned to units of product.

answer: FALSE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

150) Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $294,000 Variable manufacturing overhead per machine-hour $2.30 Recently, Job M825 was completed with the following characteristics: Number of units in the job 20 Total machine-hours 80 Direct materials $665 Direct labor cost $1,840 The unit product cost for Job M825 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $37.81 B) $59.25 C) $151.25 D) $125.25

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $294,000 + ($2.30 per machine-hour × 70,000 machine-hours) = $294,000 + $161,000 = $455,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $455,000 ÷ 70,000 machine-hours = $6.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per machine-hour × 80 machine-hours = $520 Direct materials $ 665 Direct labor 1,840 Manufacturing overhead applied 520 Total cost of Job M825 $ 3,025 Total cost of Job M825 (a) $3,025 Number of units (b) 20 Unit product cost (a) ÷ (b) $151.25 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

151) Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $294,000 Variable manufacturing overhead per machine-hour $2.30 Recently, Job M825 was completed with the following characteristics: Number of units in the job 20 Total machine-hours 80 Direct materials $665 Direct labor cost $1,840 If the company marks up its unit product costs by 40% then the selling price for a unit in Job M825 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $60.50 B) $175.35 C) $211.75 D) $231.75

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $294,000 + ($2.30 per machine-hour × 70,000 machine-hours) = $294,000 + $161,000 = $455,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $455,000 ÷ 70,000 machine-hours = $6.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per machine-hour × 80 machine-hours = $520 Direct materials $ 665 Direct labor 1,840 Manufacturing overhead applied 520 Total cost of Job M825 $ 3,025 Total cost of Job M825 (a) $3,025 Number of units (b) 20 Unit product cost (a) ÷ (b) $151.25 Unit product cost for Job M825 $ 151.25 Markup (40% × $151.25) 60.50 Selling price $ 211.75 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

100) Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $ 312,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T629 was completed with the following characteristics: Number of units in the job 50 Total machine-hours 200 The amount of overhead applied to Job T629 is closest to: A) $1,620 B) $780 C) $1,200 D) $420

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $312,000 + ($2.10 per machine-hour × 80,000 machine-hours) = $312,000 + $168,000 = $480,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $480,000 ÷ 80,000 machine-hours = $6.00 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.00 per machine-hour × 200 machine-hours = $1,200 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

122) Decorte Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 10,000 Total fixed manufacturing overhead cost $33,000 Variable manufacturing overhead per direct labor-hour $2.50 Recently, Job K332 was completed with the following characteristics: Number of units in the job 70 Total direct labor-hours 140 Direct materials $455 Direct labor cost $5,320 The total job cost for Job K332 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $5,775 B) $6,132 C) $6,587 D) $1,267

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $33,000 + ($2.50 per direct labor-hour × 10,000 direct labor-hours) = $33,000 + $25,000 = $58,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $58,000 ÷ 10,000 direct labor-hours = $5.80 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.80 per direct labor-hour × 140 direct labor-hours = $812 Direct materials $ 455 Direct labor 5,320 Manufacturing overhead applied 812 Total cost of Job K332 $ 6,587 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

84) Dejarnette Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $ 416,000 Variable manufacturing overhead per machine-hour $ 3.10 The estimated total manufacturing overhead is closest to: A) $416,003 B) $248,000 C) $664,000 D) $416,000

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $416,000 + ($3.10 per machine-hour × 80,000 machine-hours) = $416,000 + $248,000 = $664,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

20) An employee time ticket is used to record points that are earned by employees based on the hours they worked that can be used to pay for coffee, food in the cafeteria, and even in some cases for vacation travel.

answer: FALSE Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

154) Cull Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $462,000, variable manufacturing overhead of $2.20 per machine-hour, and 60,000 machine-hours. The company has provided the following data concerning Job X455 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $940 Direct labor cost $2,240 The unit product cost for Job X455 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $86.60 B) $159.00 C) $198.60 D) $49.65

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $462,000 + ($2.20 per machine-hour × 60,000 machine-hours) = $462,000 + $132,000 = $594,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $594,000 ÷ 60,000 machine-hours = $9.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.90 per machine-hour × 80 machine-hours = $792 Direct materials $ 940 Direct labor 2,240 Manufacturing overhead applied 792 Total cost of Job X455 $ 3,972 Total cost of Job X455 (a) $3,972 Number of units (b) 20 Unit product cost (a) ÷ (b) $198.60 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

116) Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed: Number of units in the job 40 Total direct labor-hours 80 Direct materials $950 Direct labor cost $2,720 The amount of overhead applied to Job T498 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $568 B) $192 C) $760 D) $952

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $497,000 + ($2.40 per direct labor-hour × 70,000 direct labor-hours) = $497,000 + $168,000 = $665,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $665,000 ÷ 70,000 direct labor-hours = $9.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.50 per direct labor-hour × 80 direct labor-hours = $760 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

115) Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed: Number of units in the job 40 Total direct labor-hours 80 Direct materials $950 Direct labor cost $2,720 The predetermined overhead rate is closest to: A) $11.90 per direct labor-hour B) $7.10 per direct labor-hour C) $9.50 per direct labor-hour D) $2.40 per direct labor-hour

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $497,000 + ($2.40 per direct labor-hour × 70,000 direct labor-hours) = $497,000 + $168,000 = $665,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $665,000 ÷ 70,000 direct labor-hours = $9.50 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

54) Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 70,000 Total fixed manufacturing overhead cost $ 511,000 Variable manufacturing overhead per direct labor-hour $ 2.10 Recently, Job K913 was completed with the following characteristics: Total direct labor-hours 150 Direct materials $ 705 Direct labor cost $ 4,650 The total job cost for Job K913 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $6,060 B) $2,115 C) $6,765 D) $5,355

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $511,000 + ($2.10 per direct labor-hour × 70,000 direct labor-hours) = $511,000 + $147,000 = $658,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $658,000 ÷ 70,000 direct labor-hours = $9.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.40 per direct labor-hour × 150 direct labor-hours = $1,410 Direct materials $ 705 Direct labor cost 4,650 Manufacturing overhead applied 1,410 Total cost of Job K913 $ 6,765 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

166) Kubes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.50 per direct labor-hour, and 30,000 direct labor-hours. The company has provided the following data concerning Job A477 which was recently completed: Total direct labor-hours 100 Direct materials $520 Direct labor cost $2,800 The amount of overhead applied to Job A477 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $300 B) $350 C) $650 D) $1,000

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $90,000 + ($3.50 per direct labor-hour × 30,000 direct labor-hours) = $90,000 + $105,000 = $195,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $195,000 ÷ 30,000 direct labor-hours = $6.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per direct labor-hour × 100 direct labor-hours = $650 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

144) Levron Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,640 The total job cost for Job P978 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $3,140 B) $892 C) $3,532 D) $3,032

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $58,000 + ($2.00 per machine-hour × 20,000 machine-hours) = $58,000 + $40,000 = $98,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $98,000 ÷ 20,000 machine-hours = $4.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.90 per machine-hour × 80 machine-hours = $392 Direct materials $ 500 Direct labor 2,640 Manufacturing overhead applied 392 Total cost of Job P978 $ 3,532 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

143) Levron Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,640 The amount of overhead applied to Job P978 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $232 B) $160 C) $392 D) $552

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $58,000 + ($2.00 per machine-hour × 20,000 machine-hours) = $58,000 + $40,000 = $98,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $98,000 ÷ 20,000 machine-hours = $4.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.90 per machine-hour × 80 machine-hours = $392 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

142) Levron Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,640 The predetermined overhead rate is closest to: A) $2.90 per machine-hour B) $2.00 per machine-hour C) $4.90 per machine-hour D) $6.90 per machine-hour

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $58,000 + ($2.00 per machine-hour × 20,000 machine-hours) = $58,000 + $40,000 = $98,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $98,000 ÷ 20,000 machine-hours = $4.90 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

52) Thach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $665,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. Recently, Job T321 was completed with the following characteristics: Number of units in the job 30 Total machine-hours 90 Direct materials $ 630 Direct labor cost $ 2,880 The unit product cost for Job T321 is closest to: A) $117.00 B) $58.50 C) $154.50 D) $51.50

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $665,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $665,000 + $210,000 = $875,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $875,000 ÷ 70,000 machine-hours = $12.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.50 per machine-hour × 90 machine-hours = $1,125 Direct materials $ 630 Direct labor 2,880 Manufacturing overhead applied 1,125 Total cost of Job T321 $ 4,635 Total cost of Job T321 (a) $ 4,635 Number of units (b) 30 Unit product cost (a) ÷ (b) $ 154.50 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

167) Kubes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.50 per direct labor-hour, and 30,000 direct labor-hours. The company has provided the following data concerning Job A477 which was recently completed: Total direct labor-hours 100 Direct materials $520 Direct labor cost $2,800 The total job cost for Job A477 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $3,450 B) $1,170 C) $3,970 D) $3,320

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $90,000 + ($3.50 per direct labor-hour × 30,000 direct labor-hours) = $90,000 + $105,000 = $195,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $195,000 ÷ 30,000 direct labor-hours = $6.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per direct labor-hour × 100 direct labor-hours = $650 Direct materials $ 520 Direct labor 2,800 Manufacturing overhead applied 650 Total cost of Job A477 $ 3,970 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

95) Gerstein Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.70 per direct labor-hour, and 50,000 direct labor-hours. The company recently completed Job M800 which required 150 direct labor-hours. The amount of overhead applied to Job M800 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $270 B) $1,380 C) $825 D) $555

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $90,000 + ($3.70 per direct labor-hour × 50,000 direct labor-hours) = $90,000 + $185,000 = $275,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $275,000 ÷ 50,000 direct labor-hours = $5.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.50 per direct labor-hour × 150 direct labor-hours = $825 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

103) Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 40,000 Total fixed manufacturing overhead cost $ 96,000 Variable manufacturing overhead per direct labor-hour $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 20 Total direct labor-hours 100 Direct materials $ 755 Direct labor cost $ 4,000 The amount of overhead applied to Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $840 B) $300 C) $540 D) $240

answer: C Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.00 per direct labor-hour × 40,000 direct labor-hours) = $96,000 + $120,000 = $216,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $216,000 ÷ 40,000 direct labor-hours = $5.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.40 per direct labor-hour × 100 direct labor-hours = $540 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

211) Vanliere Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 11,000 Direct labor-hours 3,000 6,000 Total fixed manufacturing overhead cost $ 138,700 $ 52,800 Variable manufacturing overhead per machine-hour $ 1.90 Variable manufacturing overhead per direct labor-hour $ 3.80 During the current month the company started and finished Job A803. The following data were recorded for this job: Job A803: Machining Finishing Machine-hours 90 20 Direct labor-hours 20 60 The predetermined overhead rate for the Finishing Department is closest to: A) $8.80 per direct labor-hour B) $3.98 per direct labor-hour C) $12.60 per direct labor-hour D) $3.80 per direct labor-hour

answer: C Explanation: Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $52,800 + ($3.80 per direct labor-hour × 6,000 direct labor-hours) = $52,800 + $22,800 = $75,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $75,600 ÷ 6,000 direct labor-hours = $12.60 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

173) Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 19,000 15,000 Direct labor-hours 4,000 8,000 Total fixed manufacturing overhead cost $ 129,200 $ 77,600 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job T288. The following data were recorded for this job: Job T288: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 40 Direct materials $ 730 $ 380 Direct labor cost $ 900 $ 1,200 If the company marks up its manufacturing costs by 20% then the selling price for Job T288 would be closest to: (Round your intermediate calculations to 2 decimal places.) A) $4,390.00 B) $878.00 C) $5,268.00 D) $5,795.00

answer: C Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $129,200 + ($1.60 per machine-hour × 19,000 machine-hours) = $129,200 + $30,400 = $159,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $159,600 ÷ 19,000 machine-hours = $8.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.40 per machine-hour × 80 machine-hours = $672 Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $77,600 + ($3.00 per direct labor-hour × 8,000 direct labor-hours) = $77,600 + $24,000 = $101,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $101,600 ÷ 8,000 direct labor-hours = $12.70 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.70 per direct labor-hour × 40 direct labor-hours = $508 Forming Assembly Total Direct materials $ 730 $ 380 $ 1,110 Direct labor $ 900 $ 1,200 2,100 Manufacturing overhead applied $ 672 $ 508 1,180 Total cost of Job T288 $ 4,390 Total cost of Job T288 $ 4,390.00 Markup ($4,390.00 × 20%) 878.00 Selling price $ 5,268.00 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

83) The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $3,044. A total of 46 direct labor-hours and 104 machine-hours were worked on the job. The direct labor wage rate is $15 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour. The total cost for the job on its job cost sheet would be: A) $4,332 B) $3,734 C) $3,072 D) $5,086

answer: D Explanation: Direct materials $ 3,044 Direct labor (46 direct labor-hours × $15.00 per direct labor-hour) 690 Overhead (104 machine-hours × $13.00 per machine-hour) 1,352 Total manufacturing cost for Job 450 $ 5,086 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

209) Stoke Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 20,000 15,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $ 138,000 $ 58,100 Variable manufacturing overhead per machine-hour $ 2.30 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job A460. The following data were recorded for this job: Job A460: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 50 The amount of overhead applied in the Forming Department to Job A460 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $184,000.00 B) $184.00 C) $736.00 D) $664.00

answer: C Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $138,000 + ($2.30 per machine-hour × 20,000 machine-hours) = $138,000 + $46,000 = $184,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $184,000 ÷ 20,000 machine-hours = $9.20 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.20 per machine-hour × 80 machine-hours = $736 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

219) Merati Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 28,000 $ 10,500 $ 38,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.60 During the most recent month, the company started and completed two jobs—Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job B Job L Forming machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job L is closest to: (Round your intermediate calculations to 2 decimal places.) A) $27,830 B) $11,840 C) $25,940 D) $14,100

answer: C Explanation: Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 28,000 Estimated variable manufacturing overhead ($1.80 per MH × 5,000 MHs) 9,000 Estimated total manufacturing overhead cost (a) $ 37,000 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.40 /MH Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.60 per MH × 5,000 MHs) 13,000 Estimated total manufacturing overhead cost (a) $ 23,500 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 4.70 /MH Manufacturing overhead applied to Job L: Forming ($7.40 per MH × 1,600 MHs) $ 11,840 Assembly ($4.70 per MH × 3,000 MHs) 14,100 Total manufacturing overhead applied $ 25,940 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

200) Heroux Corporation has two manufacturing departments—Forming and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Customizing Total Estimated total machine-hours (MHs) 3,000 7,000 10,000 Estimated total fixed manufacturing overhead cost $ 16,500 $ 20,300 $ 36,800 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Direct materials $ 12,800 $ 6,700 Direct labor cost $ 24,300 $ 7,800 Forming machine-hours 2,000 1,000 Customizing machine-hours 2,800 4,200 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job H is closest to: (Round your intermediate calculations to 2 decimal places.) A) $22,680 B) $30,888 C) $29,880 D) $7,200

answer: C Explanation: Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 16,500 Estimated variable manufacturing overhead ($1.70 per MH × 3,000 MHs) 5,100 Estimated total manufacturing overhead cost (a) $ 21,600 Estimated total machine-hours (b) 3,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.20 /MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 20,300 Estimated variable manufacturing overhead ($2.50 per MH × 7,000 MHs) 17,500 Estimated total manufacturing overhead cost (a) $ 37,800 Estimated total machine-hours (b) 7,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.40 /MH Manufacturing overhead applied to Job H: Forming ($7.20 per MH × 1,000 MHs) $ 7,200 Customizing ($5.40 per MH × 4,200 MHs) 22,680 Total manufacturing overhead applied $ 29,880 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

70) Marioni Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 37,100 $ 9,000 $ 46,100 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.60 During the most recent month, the company started and completed two jobs—Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job B Job H Forming machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job B is closest to: (Round your intermediate calculations to 2 decimal places.) A) $6,720 B) $33,600 C) $40,320 D) $39,480

answer: C Explanation: Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 37,100 Estimated variable manufacturing overhead ($1.70 per MH × 7,000 MHs) 11,900 Estimated total manufacturing overhead cost (a) $ 49,000 Estimated total machine-hours (b) 7,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.00 /MH Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 9,000 Estimated variable manufacturing overhead ($2.60 per MH × 3,000 MHs) 7,800 Estimated total manufacturing overhead cost (a) $ 16,800 Estimated total machine-hours (b) 3,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.60 /MH Manufacturing overhead applied to Job B: Forming ($7.00 per MH × 4,800 MHs) $ 33,600 Assembly ($5.60 per MH × 1,200 MHs) 6,720 Total manufacturing overhead applied $ 40,320 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

91) Housholder Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 310,000 Estimated activity level from the beginning of the year 20,000 machine-hours Actual total fixed manufacturing overhead $ 338,000 Actual activity level 18,300 machine-hours The predetermined overhead rate is closest to: A) $18.47 B) $16.94 C) $16.90 D) $15.50

answer: D Explanation: Estimated total fixed manufacturing overhead (a) $ 310,000 Estimated activity level (b) 20,000 Predetermined overhead rate (a) ÷ (b) $ 15.50 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

195) Collini Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 17,000 15,000 Direct labor-hours 3,000 6,000 Total fixed manufacturing overhead cost $ 102,000 $ 61,200 Variable manufacturing overhead per machine-hour $ 1.70 Variable manufacturing overhead per direct labor-hour $ 4.10 During the current month the company started and finished Job T268. The following data were recorded for this job: Job T268: Machining Customizing Machine-hours 80 30 Direct labor-hours 30 50 Direct materials $ 720 $ 380 Direct labor cost $ 900 $ 1,500 The total job cost for Job T268 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $2,595 B) $616 C) $4,831 D) $2,236

answer: C Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,000 + ($1.70 per machine-hour × 17,000 machine-hours) = $102,000 + $28,900 = $130,900 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $130,900 ÷ 17,000 machine-hours = $7.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.70 per machine-hour × 80 machine-hours = $616 Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $61,200 + ($4.10 per direct labor-hour × 6,000 direct labor-hours) = $61,200 + $24,600 = $85,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $85,800 ÷ 6,000 direct labor-hours = $14.30 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.30 per direct labor-hour × 50 direct labor-hours = $715 Machining Customizing Total Direct materials $ 720 $ 380 $ 1,100 Direct labor $ 900 $ 1,500 2,400 Manufacturing overhead applied $ 616 $ 715 1,331 Total cost of Job T268 $ 4,831 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

207) Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60 The amount of overhead applied in the Machining Department to Job T272 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $137,600.00 B) $126.00 C) $516.00 D) $564.00

answer: C Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $104,000 + ($2.10 per machine-hour × 16,000 machine-hours) = $104,000 + $33,600 = $137,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $137,600 ÷ 16,000 machine-hours = $8.60 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.60 per machine-hour × 60 machine-hours = $516 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

179) Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Finishing Machine-hours 19,000 12,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 136,800 $ 69,600 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.20 During the current month the company started and finished Job K928. The following data were recorded for this job: Job K928: Machining Finishing Machine-hours 90 10 Direct labor-hours 30 50 Direct materials $ 775 $ 415 Direct labor cost $ 630 $ 1,050 The estimated total manufacturing overhead for the Machining Department is closest to: A) $136,800 B) $34,200 C) $171,000 D) $359,100

answer: C Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $136,800 + ($1.80 per machine-hour × 19,000 machine-hours) = $136,800 + $34,200 = $171,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

71) Bassett Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 16,000 12,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 118,400 $ 87,200 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 The predetermined overhead rate for the Milling Department is closest to: A) $19.00 per machine-hour B) $2.10 per machine-hour C) $9.50 per machine-hour D) $7.40 per machine-hour

answer: C Explanation: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $118,400 + ($2.10 per machine-hour × 16,000 machine-hours) = $118,400 + $33,600 = $152,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $152,000 ÷ 16,000 machine-hours = $9.50 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

6) If a job is not completed at year end, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used.

answer: FALSE Difficulty: 2 Medium Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

198) Heroux Corporation has two manufacturing departments—Forming and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Customizing Total Estimated total machine-hours (MHs) 3,000 7,000 10,000 Estimated total fixed manufacturing overhead cost $ 16,500 $ 20,300 $ 36,800 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Direct materials $ 12,800 $ 6,700 Direct labor cost $ 24,300 $ 7,800 Forming machine-hours 2,000 1,000 Customizing machine-hours 2,800 4,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job H is closest to: (Round your intermediate calculations to 2 decimal places.) A) $19,136 B) $5,940 C) $30,888 D) $24,948

answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead $ 16,500 Estimated variable manufacturing overhead ($1.70 per MH × 3,000 MHs) 5,100 Estimated total manufacturing overhead cost $ 21,600 Customizing Estimated fixed manufacturing overhead $ 20,300 Estimated variable manufacturing overhead ($2.50 per MH × 7,000 MHs) 17,500 Estimated total manufacturing overhead cost $ 37,800 The second step is to combine the estimated manufacturing overhead costs in the two departments ($21,600 + $37,800 = $59,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 59,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.94 per MH The overhead applied to Job H is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.94 per MH × (1,000 MHs + 4,200 MHs) = $5.94 per MH × (5,200 MHs) = $30,888 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

119) Nielsen Corporation has two manufacturing departments—Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,700 $ 10,800 $ 15,500 Estimated variable manufacturing overhead cost per MH $ 1.20 $ 2.20 During the most recent month, the company started and completed two jobs—Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job F Job M Direct materials $ 13,000 $ 7,400 Direct labor cost $ 20,400 $ 8,800 Machining machine-hours 700 300 Assembly machine-hours 1,600 2,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job F is closest to: (Round your intermediate calculations to 2 decimal places.) A) $13,000 B) $20,400 C) $45,130 D) $11,730

answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 4,700 Estimated variable manufacturing overhead ($1.20 per MH × 1,000 MHs) 1,200 Estimated total manufacturing overhead cost $ 5,900 Assembly Estimated fixed manufacturing overhead $ 10,800 Estimated variable manufacturing overhead ($2.20 per MH × 4,000 MHs) 8,800 Estimated total manufacturing overhead cost $ 19,600 The second step is to combine the estimated manufacturing overhead costs in the two departments ($5,900 + $19,600 = $25,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 25,500 Estimated total machine hours 5,000 MHs Predetermined overhead rate $ 5.10 per MH The overhead applied to Job F is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.10 per MH × (700 MHs + 1,600 MHs) = $5.10 per MH × (2,300 MHs) = $11,730 Job F's manufacturing cost: Direct materials $ 13,000 Direct labor cost 20,400 Manufacturing overhead applied 11,730 Total manufacturing cost $ 45,130 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

185) Janicki Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 23,400 $ 28,200 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job A Job J Direct materials $ 12,000 $ 7,700 Direct labor cost $ 20,700 $ 6,400 Machining machine-hours 700 300 Customizing machine-hours 3,600 5,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round your intermediate calculations to 2 decimal places.) A) $90,707 B) $27,487 C) $82,461 D) $54,974

answer: C Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 4,800 Estimated variable manufacturing overhead ($1.10 per MH × 1,000 MHs) 1,100 Estimated total manufacturing overhead cost $ 5,900 Customizing Estimated fixed manufacturing overhead $ 23,400 Estimated variable manufacturing overhead ($2.50 per MH × 9,000 MHs) 22,500 Estimated total manufacturing overhead cost $ 45,900 The second step is to combine the estimated manufacturing overhead costs in the two departments ($5,900 + $45,900 = $51,800) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 51,800 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.18 per MH The overhead applied to Job A is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.18 per MH × (700 MHs + 3,600 MHs) = $5.18 per MH × (4,300 MHs) = $22,274 Job A's manufacturing cost: Direct materials $ 12,000 Direct labor cost 20,700 Manufacturing overhead applied 22,274 Total manufacturing cost $ 54,974 The selling price for Job A: Total manufacturing cost $ 54,974 Markup (50%) 27,487 Selling price $ 82,461 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

57) Atteberry Corporation has two manufacturing departments—Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Finishing Total Estimated total machine-hours (MHs) 6,000 4,000 10,000 Estimated total fixed manufacturing overhead cost $ 30,000 $ 11,200 $ 41,200 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 2.40 During the most recent month, the company started and completed two jobs—Job E and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job E Job L Direct materials $ 13,400 $ 9,100 Direct labor cost $ 24,500 $ 7,000 Machining machine-hours 4,100 1,900 Finishing machine-hours 1,600 2,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job E is closest to: (Round your intermediate calculations to 2 decimal places.) A) $24,500 B) $35,796 C) $13,400 D) $73,696

answer: D Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 30,000 Estimated variable manufacturing overhead ($2.00 per MH × 6,000 MHs) 12,000 Estimated total manufacturing overhead cost $ 42,000 Finishing Estimated fixed manufacturing overhead $ 11,200 Estimated variable manufacturing overhead ($2.40 per MH × 4,000 MHs) 9,600 Estimated total manufacturing overhead cost $ 20,800 The second step is to combine the estimated manufacturing overhead costs in the two departments ($42,000 + $20,800 = $62,800) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 62,800 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.28 per MH The overhead applied to Job E is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $6.28 per MH × (4,100 MHs + 1,600 MHs) = $6.28 per MH × (5,700 MHs) = $35,796 Job E's manufacturing cost: Direct materials $ 13,400 Direct labor cost 24,500 Manufacturing overhead applied 35,796 Total manufacturing cost $ 73,696 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

10) Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job.

answer: FALSE Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

175) Macnamara Corporation has two manufacturing departments—Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 8,800 $ 13,600 Estimated variable manufacturing overhead cost/MH $ 1.80 $ 2.90 During the most recent month, the company started and completed two jobs—Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job F Job M Direct materials $ 11,500 $ 9,000 Direct labor cost $ 18,400 $ 7,400 Casting machine-hours 700 300 Finishing machine-hours 1,600 2,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job M is closest to: (Round your intermediate calculations to 2 decimal places.) A) $15,310 B) $47,767 C) $30,620 D) $45,930

answer: D Explanation: Casting Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 4,800 Estimated variable manufacturing overhead ($1.80 per MH × 1,000 MHs) 1,800 Estimated total manufacturing overhead cost (a) $ 6,600 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 6.60 /MH Finishing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 8,800 Estimated variable manufacturing overhead ($2.90 per MH × 4,000 MHs) 11,600 Estimated total manufacturing overhead cost (a) $ 20,400 Estimated total machine-hours (b) 4,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.10 /MH Manufacturing overhead applied to Job M: Casting ($6.60 per MH × 300 MHs) $ 1,980 Finishing ($5.10 per MH × 2,400 MHs) 12,240 Total manufacturing overhead applied $ 14,220 The selling price for Job M would be calculated as follows: Direct materials $ 9,000 Direct labor cost 7,400 Manufacturing overhead applied 14,220 Total manufacturing cost $ 30,620 Markup (50%) 15,310 Selling price $ 45,930 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

155) Cull Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $462,000, variable manufacturing overhead of $2.20 per machine-hour, and 60,000 machine-hours. The company has provided the following data concerning Job X455 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $940 Direct labor cost $2,240 If the company marks up its unit product costs by 20% then the selling price for a unit in Job X455 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $258.32 B) $190.80 C) $39.72 D) $238.32

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $462,000 + ($2.20 per machine-hour × 60,000 machine-hours) = $462,000 + $132,000 = $594,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $594,000 ÷ 60,000 machine-hours = $9.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.90 per machine-hour × 80 machine-hours = $792 Direct materials $ 940 Direct labor 2,240 Manufacturing overhead applied 792 Total cost of Job X455 $ 3,972 Total cost of Job X455 (a) $3,972 Number of units (b) 20 Unit product cost (a) ÷ (b) $198.60 Unit product cost for Job X455 $ 198.60 Markup (20% × $198.60) 39.72 Selling price $ 238.32 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

141) Sivret Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $624,000 Variable manufacturing overhead per machine-hour $3.10 Recently, Job M598 was completed with the following characteristics: Number of units in the job 60 Total machine-hours 300 Direct materials $645 Direct labor cost $9,000 If the company marks up its unit product costs by 40% then the selling price for a unit in Job M598 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $321.35 B) $225.05 C) $86.10 D) $301.35

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $624,000 + ($3.10 per machine-hour × 80,000 machine-hours) = $624,000 + $248,000 = $872,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $872,000 ÷ 80,000 machine-hours = $10.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.90 per machine-hour × 300 machine-hours = $3,270 Direct materials $ 645 Direct labor 9,000 Manufacturing overhead applied 3,270 Total cost of Job M598 $ 12,915 Total cost of Job M598 (a) $12,915 Number of units (b) 60 Unit product cost (a) ÷ (b) $215.25 Unit product cost for Job M598 $ 215.25 Markup (40% × $215.25) 86.10 Selling price $ 301.35 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

194) Collini Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 17,000 15,000 Direct labor-hours 3,000 6,000 Total fixed manufacturing overhead cost $ 102,000 $ 61,200 Variable manufacturing overhead per machine-hour $ 1.70 Variable manufacturing overhead per direct labor-hour $ 4.10 During the current month the company started and finished Job T268. The following data were recorded for this job: Job T268: Machining Customizing Machine-hours 80 30 Direct labor-hours 30 50 Direct materials $ 720 $ 380 Direct labor cost $ 900 $ 1,500 The total amount of overhead applied in both departments to Job T268 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $616 B) $715 C) $2,046 D) $1,331

answer: D Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,000 + ($1.70 per machine-hour × 17,000 machine-hours) = $102,000 + $28,900 = $130,900 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $130,900 ÷ 17,000 machine-hours = $7.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.70 per machine-hour × 80 machine-hours = $616 Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $61,200 + ($4.10 per direct labor-hour × 6,000 direct labor-hours) = $61,200 + $24,600 = $85,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $85,800 ÷ 6,000 direct labor-hours = $14.30 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.30 per direct labor-hour × 50 direct labor-hours = $715 Overhead applied to Job T268 Machining Department $ 616 Customizing Department 715 Total $ 1,331 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

38) Valvano Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $440,000, variable manufacturing overhead of $2.20 per machine-hour, and 50,000 machine-hours. The estimated total manufacturing overhead is closest to: A) $440,000 B) $110,000 C) $440,002 D) $550,000

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $440,000 + ($2.20 per machine-hour × 50,000 machine-hours) = $440,000 + $110,000 = $550,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

193) Sanderlin Corporation has two manufacturing departments—Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Finishing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 26,500 $ 13,500 $ 40,000 Estimated variable manufacturing overhead cost per MH $ 2.00 $ 3.00 During the most recent month, the company started and completed two jobs—Job C and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job C Job L Direct materials $ 12,500 $ 8,200 Direct labor cost $ 20,200 $ 6,400 Machining machine-hours 3,400 1,600 Finishing machine-hours 2,000 3,000 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. The calculated selling price for Job C is closest to: (Round your intermediate calculations to 2 decimal places.) A) $87,666 B) $68,920 C) $13,784 D) $82,704

answer: D Explanation: Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 26,500 Estimated variable manufacturing overhead ($2.00 per MH × 5,000 MHs) 10,000 Estimated total manufacturing overhead cost (a) $ 36,500 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.30 /MH Finishing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 13,500 Estimated variable manufacturing overhead ($3.00 per MH × 5,000 MHs) 15,000 Estimated total manufacturing overhead cost (a) $ 28,500 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.70 /MH Manufacturing overhead applied to Job C: Machining ($7.30 per MH × 3,400 MHs) $ 24,820 Finishing ($5.70 per MH × 2,000 MHs) 11,400 Total manufacturing overhead applied $ 36,220 The selling price for Job C would be calculated as follows: Direct materials $ 12,500 Direct labor cost 20,200 Manufacturing overhead applied 36,220 Total manufacturing cost $ 68,920 Markup (20%) 13,784 Selling price $ 82,704 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

221) Barbeau Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 17,000 13,000 Direct labor-hours 2,000 5,000 Total fixed manufacturing overhead cost $ 119,000 $ 42,000 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 4.30 During the current month the company started and finished Job A492. The following data were recorded for this job: Job A492: Milling Customizing Machine-hours 90 20 Direct labor-hours 20 50 The amount of overhead applied in the Milling Department to Job A492 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $146,200.00 B) $144.00 C) $756.00 D) $774.00

answer: D Explanation: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $119,000 + ($1.60 per machine-hour × 17,000 machine-hours) = $119,000 + $27,200 = $146,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $146,200 ÷ 17,000 machine-hours = $8.60 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.60 per machine-hour × 90 machine-hours = $774 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

67) Boward Corporation has two production departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Assembly Machine-hours 18,000 12,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $ 120,600 $ 76,300 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 4.30 During the current month the company started and finished Job T818. The following data were recorded for this job: Job T818: Milling Assembly Machine-hours 50 30 Direct labor-hours 10 40 The total amount of overhead applied in both departments to Job T818 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,651 B) $608 C) $435 D) $1,043

answer: D Explanation: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $120,600 + ($2.00 per machine-hour × 18,000 machine-hours) = $120,600 + $36,000 = $156,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $156,600 ÷ 18,000 machine-hours = $8.70 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.70 per machine-hour × 50 machine-hours = $435 Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $76,300 + ($4.30 per direct labor-hour × 7,000 direct labor-hours) = $76,300 + $30,100 = $106,400 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $106,400 ÷ 7,000 direct labor-hours = $15.20 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $15.20 per direct labor-hour × 40 direct labor-hours = $608 Overhead applied to Job T818 Milling Department $ 435 Assembly Department 608 Total $ 1,043 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

88) Morataya Corporation has two manufacturing departments—Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 39,200 $ 6,600 $ 45,800 Estimated variable manufacturing overhead cost per MH $ 1.90 $ 2.10 During the most recent month, the company started and completed two jobs—Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job B Job G Direct materials $ 14,800 $ 8,300 Direct labor cost $ 22,000 $ 8,900 Machining machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to: A) $4.00 B) $7.50 C) $4.58 D) $6.54

answer: D Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 39,200 Estimated variable manufacturing overhead ($1.90 per MH × 7,000 MHs) 13,300 Estimated total manufacturing overhead cost $ 52,500 Assembly Estimated fixed manufacturing overhead $ 6,600 Estimated variable manufacturing overhead ($2.10 per MH × 3,000 MHs) 6,300 Estimated total manufacturing overhead cost $ 12,900 The second step is to combine the estimated manufacturing overhead costs in the two departments ($52,500 + $12,900 = $65,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 65,400 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 6.54 per MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

28) Which of the following statements is NOT correct concerning multiple overhead rate systems? A) A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. B) A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. C) A company may choose to create a separate overhead rate for each of its production departments. D) In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours.

answer: D Difficulty: 1 Easy Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

92) Housholder Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 310,000 Estimated activity level from the beginning of the year 20,000 machine-hours Actual total fixed manufacturing overhead $ 338,000 Actual activity level 18,300 machine-hours The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A) $28,000 B) $309,270 C) $310,000 D) $283,650

answer: D Explanation: Estimated total fixed manufacturing overhead (a) $ 310,000 Estimated activity level (b) 20,000 Predetermined overhead rate (a) ÷ (b) $ 15.50 Actual activity level 18,300 Manufacturing overhead applied $ 283,650 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

96) Krier Corporation uses a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $738,000 and 30,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $792,000 and 31,500 total direct labor-hours during the period. The predetermined overhead rate is closest to: A) $26.40 B) $25.14 C) $23.43 D) $24.60

answer: D Explanation: Estimated total fixed manufacturing overhead (a) $ 738,000 Estimated activity level (b) 30,000 Predetermined overhead rate (a) ÷ (b) $ 24.60 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

79) Kreuzer Corporation is using a predetermined overhead rate of $22.30 per machine-hour that was based on estimated total fixed manufacturing overhead of $446,000 and 20,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $409,000 and 18,200 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: A) $446,000 B) $37,000 C) $372,190 D) $405,860

answer: D Explanation: Predetermined overhead rate (a) $ 22.30 Actual activity level (b) 18,200 Manufacturing overhead applied (a) × (b) $ 405,860 Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

32) Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Direct materials $ 1,000 Direct labor $ 3,000 Sales commissions $ 4,000 Salary of production supervisor $ 2,000 Indirect materials $ 400 Advertising expense $ 800 Rent on factory equipment $ 1,000 Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $6.80 per machine-hour B) $6.00 per machine-hour C) $3.00 per machine-hour D) $3.40 per machine-hour

answer: D Explanation: Salary of production supervisor $ 2,000 Indirect materials 400 Rent on factory equipment 1,000 Total manufacturing overhead $ 3,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $3,400 ÷ 1,000 machine-hours = $3.40 per machine-hour Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

202) Tiff Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Casting Assembly Machine-hours 17,000 10,000 Direct labor-hours 1,000 5,000 Total fixed manufacturing overhead cost $ 129,200 $ 46,500 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 3.80 During the current month the company started and finished Job P131. The following data were recorded for this job: Job P131: Casting Assembly Machine-hours 90 20 Direct labor-hours 20 60 The amount of overhead applied in the Assembly Department to Job P131 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $228.00 B) $558.00 C) $65,500.00 D) $786.00

answer: D Explanation: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $46,500 + ($3.80 per direct labor-hour × 5,000 direct labor-hours) = $46,500 + $19,000 = $65,500 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $65,500 ÷ 5,000 direct labor-hours = $13.10 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.10 per direct labor-hour × 60 direct labor-hours = $786 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

72) Fatzinger Corporation has two production departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Assembly Machine-hours 20,000 14,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $ 132,000 $ 57,400 Variable manufacturing overhead per machine-hour $ 2.30 Variable manufacturing overhead per direct labor-hour $ 3.40 The predetermined overhead rate for the Assembly Department is closest to: A) $8.20 per direct labor-hour B) $3.40 per direct labor-hour C) $4.06 per direct labor-hour D) $11.60 per direct labor-hour

answer: D Explanation: Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $57,400 + ($3.40 per direct labor-hour × 7,000 direct labor-hours) = $57,400 + $23,800 = $81,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $81,200 ÷ 7,000 direct labor-hours = $11.60 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

74) Tarrant Corporation has two manufacturing departments—Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 5,700 $ 11,200 $ 16,900 Estimated variable manufacturing overhead cost per MH $ 1.30 $ 2.90 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Casting Department is closest to: A) $5.70 B) $1.30 C) $5.96 D) $7.00

answer: D Explanation: Casting Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 5,700 Estimated variable manufacturing overhead ($1.30 per MH × 1,000 MHs) 1,300 Estimated total manufacturing overhead cost (a) $ 7,000 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.00 /MH Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

204) Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60 The estimated total manufacturing overhead for the Customizing Department is closest to: A) $40,950 B) $19,800 C) $56,400 D) $76,200

answer: D Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $56,400 + ($3.30 per direct labor-hour × 6,000 direct labor-hours) = $56,400 + $19,800 = $76,200 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

231) Jurica Corporation has two production departments, Forming and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Customizing Machine-hours 19,000 15,000 Direct labor-hours 4,000 6,000 Total fixed manufacturing overhead cost $ 100,700 $ 63,000 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 3.90 The predetermined overhead rate for the Customizing Department is closest to: A) $4.55 per direct labor-hour B) $3.90 per direct labor-hour C) $10.50 per direct labor-hour D) $14.40 per direct labor-hour

answer: D Explanation: Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $63,000 + ($3.90 per direct labor-hour × 6,000 direct labor-hours) = $63,000 + $23,400 = $86,400 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $86,400 ÷ 6,000 direct labor-hours = $14.40 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

107) Branin Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $160,000, variable manufacturing overhead of $3.40 per direct labor-hour, and 80,000 direct labor-hours. The company has provided the following data concerning Job A578 which was recently completed: Total direct labor-hours 250 Direct materials $ 715 Direct labor cost $ 9,000 The predetermined overhead rate is closest to: A) $8.80 per direct labor-hour B) $2.00 per direct labor-hour C) $3.40 per direct labor-hour D) $5.40 per direct labor-hour

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $160,000 + ($3.40 per direct labor-hour × 80,000 direct labor-hours) = $160,000 + $272,000 = $432,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $432,000 ÷ 80,000 direct labor-hours = $5.40 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

139) Sivret Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $624,000 Variable manufacturing overhead per machine-hour $3.10 Recently, Job M598 was completed with the following characteristics: Number of units in the job 60 Total machine-hours 300 Direct materials $645 Direct labor cost $9,000 The total job cost for Job M598 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $12,270 B) $9,645 C) $3,915 D) $12,915

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $624,000 + ($3.10 per machine-hour × 80,000 machine-hours) = $624,000 + $248,000 = $872,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $872,000 ÷ 80,000 machine-hours = $10.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.90 per machine-hour × 300 machine-hours = $3,270 Direct materials $ 645 Direct labor 9,000 Manufacturing overhead applied 3,270 Total cost of Job M598 $ 12,915 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

126) Beans Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 50 Direct materials $920 Direct labor cost $1,400 The amount of overhead applied to Job K818 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $135 B) $140 C) $415 D) $275

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $162,000 + ($2.80 per direct labor-hour × 60,000 direct labor-hours) = $162,000 + $168,000 = $330,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $330,000 ÷ 60,000 direct labor-hours = $5.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.50 per direct labor-hour × 50 direct labor-hours = $275 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

41) Helland Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 30,000 Total fixed manufacturing overhead cost $ 189,000 Variable manufacturing overhead per direct labor-hour $ 2.50 The predetermined overhead rate is closest to: A) $2.50 per direct labor-hour B) $11.30 per direct labor-hour C) $6.30 per direct labor-hour D) $8.80 per direct labor-hour

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $189,000 + ($2.50 per direct labor-hour × 30,000 direct labor-hours) = $189,000 + $75,000 = $264,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $264,000 ÷ 30,000 direct labor-hours = $8.80 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

159) Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,160 If the company marks up its unit product costs by 40% then the selling price for a unit in Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $186.20 B) $272.28 C) $72.08 D) $252.28

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $237,000 + ($3.90 per machine-hour × 30,000 machine-hours) = $237,000 + $117,000 = $354,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $354,000 ÷ 30,000 machine-hours = $11.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.80 per machine-hour × 80 machine-hours = $944 Direct materials $ 500 Direct labor 2,160 Manufacturing overhead applied 944 Total cost of Job A496 $ 3,604 Total cost of Job A496 (a) $ 3,604 Number of units (b) 20 Unit product cost (a) ÷ (b) $ 180.20 Unit product cost for Job A496 $ 180.20 Markup (40% × $180.20) 72.08 Selling price $ 252.28 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

158) Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $500 Direct labor cost $2,160 The unit product cost for Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $133.00 B) $72.20 C) $45.05 D) $180.20

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $237,000 + ($3.90 per machine-hour × 30,000 machine-hours) = $237,000 + $117,000 = $354,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $354,000 ÷ 30,000 machine-hours = $11.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.80 per machine-hour × 80 machine-hours = $944 Direct materials $ 500 Direct labor 2,160 Manufacturing overhead applied 944 Total cost of Job A496 $ 3,604 Total cost of Job A496 (a) $3,604 Number of units (b) 20 Unit product cost (a) ÷ (b) $180.20 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

118) Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed: Number of units in the job 40 Total direct labor-hours 80 Direct materials $950 Direct labor cost $2,720 The unit product cost for Job T498 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $55.38 B) $42.75 C) $91.75 D) $110.75

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $497,000 + ($2.40 per direct labor-hour × 70,000 direct labor-hours) = $497,000 + $168,000 = $665,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $665,000 ÷ 70,000 direct labor-hours = $9.50 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.50 per direct labor-hour × 80 direct labor-hours = $760 Direct materials $ 950 Direct labor 2,720 Manufacturing overhead applied 760 Total cost of Job T498 $ 4,430 Total cost of Job T498 (a) $ 4,430 Number of units (b) 40 Unit product cost (a) ÷ (b) $ 110.75 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

133) Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $675 Direct labor cost $1,050 The total job cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,365 B) $1,725 C) $990 D) $2,040

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 30,000 machine-hours = $10.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.50 per machine-hour × 30 machine-hours = $315 Direct materials $ 675 Direct labor 1,050 Manufacturing overhead applied 315 Total cost of Job T687 $ 2,040 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

134) Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $675 Direct labor cost $1,050 The unit product cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $99.00 B) $68.00 C) $172.50 D) $204.00

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 30,000 machine-hours = $10.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.50 per machine-hour × 30 machine-hours = $315 Direct materials $ 675 Direct labor 1,050 Manufacturing overhead applied 315 Total cost of Job T687 $ 2,040 Total cost of Job T687 (a) $2,040 Number of units (b) 10 Unit product cost (a) ÷ (b) $204.00 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

149) Bolander Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $294,000 Variable manufacturing overhead per machine-hour $2.30 Recently, Job M825 was completed with the following characteristics: Number of units in the job 20 Total machine-hours 80 Direct materials $665 Direct labor cost $1,840 The total job cost for Job M825 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $2,360 B) $2,505 C) $1,185 D) $3,025

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $294,000 + ($2.30 per machine-hour × 70,000 machine-hours) = $294,000 + $161,000 = $455,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $455,000 ÷ 70,000 machine-hours = $6.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.50 per machine-hour × 80 machine-hours = $520 Direct materials $ 655 Direct labor 1,840 Manufacturing overhead applied 520 Total cost of Job M825 $ 3,025 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

99) Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $ 312,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T629 was completed with the following characteristics: Number of units in the job 50 Total machine-hours 200 The predetermined overhead rate is closest to: A) $8.10 per machine-hour B) $2.10 per machine-hour C) $3.90 per machine-hour D) $6.00 per machine-hour

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $312,000 + ($2.10 per machine-hour × 80,000 machine-hours) = $312,000 + $168,000 = $480,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $480,000 ÷ 80,000 machine-hours = $6.00 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

98) Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $ 312,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T629 was completed with the following characteristics: Number of units in the job 50 Total machine-hours 200 The estimated total manufacturing overhead is closest to: A) $168,000 B) $312,002 C) $312,000 D) $480,000

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $312,000 + ($2.10 per machine-hour × 80,000 machine-hours) = $312,000 + $168,000 = $480,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

13) A job cost sheet is used to record how much a customer pays for the job once the job is completed.

answer: FALSE Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

138) Sivret Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $624,000 Variable manufacturing overhead per machine-hour $3.10 Recently, Job M598 was completed with the following characteristics: Number of units in the job 60 Total machine-hours 300 Direct materials $645 Direct labor cost $9,000 The amount of overhead applied to Job M598 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $930 B) $4,200 C) $2,340 D) $3,270

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $624,000 + ($3.10 per machine-hour × 80,000 machine-hours) = $624,000 + $248,000 = $872,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $872,000 ÷ 80,000 machine-hours = $10.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.90 per machine-hour × 300 machine-hours = $3,270 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

104) Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 40,000 Total fixed manufacturing overhead cost $ 96,000 Variable manufacturing overhead per direct labor-hour $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 20 Total direct labor-hours 100 Direct materials $ 755 Direct labor cost $ 4,000 The total job cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $4,540 B) $4,755 C) $1,295 D) $5,295

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.00 per direct labor-hour × 40,000 direct labor-hours) = $96,000 + $120,000 = $216,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $216,000 ÷ 40,000 direct labor-hours = $5.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.40 per direct labor-hour × 100 direct labor-hours = $540 Direct materials $ 755 Direct labor 4,000 Manufacturing overhead applied 540 Total cost of Job P951 $ 5,295 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

102) Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 40,000 Total fixed manufacturing overhead cost $ 96,000 Variable manufacturing overhead per direct labor-hour $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 20 Total direct labor-hours 100 Direct materials $ 755 Direct labor cost $ 4,000 The predetermined overhead rate is closest to: A) $2.40 per direct labor-hour B) $3.00 per direct labor-hour C) $8.40 per direct labor-hour D) $5.40 per direct labor-hour

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.00 per direct labor-hour × 40,000 direct labor-hours) = $96,000 + $120,000 = $216,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $216,000 ÷ 40,000 direct labor-hours = $5.40 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

101) Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 40,000 Total fixed manufacturing overhead cost $ 96,000 Variable manufacturing overhead per direct labor-hour $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 20 Total direct labor-hours 100 Direct materials $ 755 Direct labor cost $ 4,000 The estimated total manufacturing overhead is closest to: A) $120,000 B) $96,003 C) $96,000 D) $216,000

answer: D Explanation: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $96,000 + ($3.00 per direct labor-hour × 40,000 direct labor-hours) = $96,000 + $120,000 = $216,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

225) Petty Corporation has two production departments, Milling and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Finishing Machine-hours 20,000 14,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 148,000 $ 88,000 Variable manufacturing overhead per machine-hour $ 1.90 Variable manufacturing overhead per direct labor-hour $ 3.60 The predetermined overhead rate for the Finishing Department is closest to: A) $5.84 per direct labor-hour B) $3.60 per direct labor-hour C) $11.00 per direct labor-hour D) $14.60 per direct labor-hour

answer: D Explanation: Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $88,000 + ($3.60 per direct labor-hour × 8,000 direct labor-hours) = $88,000 + $28,800 = $116,800 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $116,800 ÷ 8,000 direct labor-hours = $14.60 per direct labor-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

230) Jurica Corporation has two production departments, Forming and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Customizing Machine-hours 19,000 15,000 Direct labor-hours 4,000 6,000 Total fixed manufacturing overhead cost $ 100,700 $ 63,000 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 3.90 The predetermined overhead rate for the Forming Department is closest to: A) $23.12 per machine-hour B) $2.00 per machine-hour C) $5.30 per machine-hour D) $7.30 per machine-hour

answer: D Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $100,700 + ($2.00 per machine-hour × 19,000 machine-hours) = $100,700 + $38,000 = $138,700 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $138,700 ÷ 19,000 machine-hours = $7.30 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

213) Ahlheim Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 16,000 15,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 102,400 $ 55,200 Variable manufacturing overhead per machine-hour $ 2.30 Variable manufacturing overhead per direct labor-hour $ 4.50 During the current month the company started and finished Job T924. The following data were recorded for this job: Job T924: Forming Assembly Machine-hours 70 20 Direct labor-hours 30 40 Direct materials $ 870 $ 385 Direct labor cost $ 630 $ 840 The estimated total manufacturing overhead for the Forming Department is closest to: A) $36,800 B) $102,400 C) $309,867 D) $139,200

answer: D Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $102,400 + ($2.30 per machine-hour × 16,000 machine-hours) = $102,400 + $36,800 = $139,200 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

172) Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 19,000 15,000 Direct labor-hours 4,000 8,000 Total fixed manufacturing overhead cost $ 129,200 $ 77,600 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job T288. The following data were recorded for this job: Job T288: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 40 Direct materials $ 730 $ 380 Direct labor cost $ 900 $ 1,200 The total job cost for Job T288 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $672 B) $2,088 C) $2,302 D) $4,390

answer: D Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $129,200 + ($1.60 per machine-hour × 19,000 machine-hours) = $129,200 + $30,400 = $159,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $159,600 ÷ 19,000 machine-hours = $8.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.40 per machine-hour × 80 machine-hours = $672 Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $77,600 + ($3.00 per direct labor-hour × 8,000 direct labor-hours) = $77,600 + $24,000 = $101,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $101,600 ÷ 8,000 direct labor-hours = $12.70 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.70 per direct labor-hour × 40 direct labor-hours = $508 Forming Assembly Total Direct materials $ 730 $ 380 $ 1,110 Direct labor $ 900 $ 1,200 2,100 Manufacturing overhead applied $ 672 $ 508 1,180 Total cost of Job T288 $ 4,390 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

171) Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 19,000 15,000 Direct labor-hours 4,000 8,000 Total fixed manufacturing overhead cost $ 129,200 $ 77,600 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job T288. The following data were recorded for this job: Job T288: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 40 Direct materials $ 730 $ 380 Direct labor cost $ 900 $ 1,200 The total amount of overhead applied in both departments to Job T288 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $508 B) $672 C) $1,688 D) $1,180

answer: D Explanation: Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $129,200 + ($1.60 per machine-hour × 19,000 machine-hours) = $129,200 +$30,400 = $159,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $159,600 ÷ 19,000 machine-hours = $8.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.40 per machine-hour × 80 machine-hours = $672 Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $77,600 + ($3.00 per direct labor-hour × 8,000 direct labor-hours) = $77,600 + $24,000 = $101,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $101,600 ÷ 8,000 direct labor-hours = $12.70 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.70 per direct labor-hour × 40 direct labor-hours = $508 Overhead applied to Job T288 Forming Department $ 672 Assembly Department 508 Total $ 1,180 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

14) In a job-order costing system, costs are traced to individual units of product. The sum total of such traced costs is called the unit product cost.

answer: FALSE Difficulty: 2 Medium Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

199) Heroux Corporation has two manufacturing departments—Forming and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Customizing Total Estimated total machine-hours (MHs) 3,000 7,000 10,000 Estimated total fixed manufacturing overhead cost $ 16,500 $ 20,300 $ 36,800 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.50 During the most recent month, the company started and completed two jobs—Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Direct materials $ 12,800 $ 6,700 Direct labor cost $ 24,300 $ 7,800 Forming machine-hours 2,000 1,000 Customizing machine-hours 2,800 4,200 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job A is closest to: (Round your intermediate calculations to 2 decimal places.) A) $14,400 B) $15,120 C) $28,512 D) $29,520

answer: D Explanation: Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 16,500 Estimated variable manufacturing overhead ($1.70 per MH × 3,000 MHs) 5,100 Estimated total manufacturing overhead cost (a) $ 21,600 Estimated total machine-hours (b) 3,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.20 /MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 20,300 Estimated variable manufacturing overhead ($2.50 per MH × 7,000 MHs) 17,500 Estimated total manufacturing overhead cost (a) $ 37,800 Estimated total machine-hours (b) 7,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.40 /MH Manufacturing overhead applied to Job A: Forming ($7.20 per MH × 2,000 MHs) $ 14,400 Customizing ($5.40 per MH × 2,800 MHs) 15,120 Total manufacturing overhead applied $ 29,520 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

218) Merati Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 28,000 $ 10,500 $ 38,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.60 During the most recent month, the company started and completed two jobs—Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job B Job L Forming machine-hours 3,400 1,600 Assembly machine-hours 2,000 3,000 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job B is closest to: (Round your intermediate calculations to 2 decimal places.) A) $9,400 B) $25,160 C) $32,670 D) $34,560

answer: D Explanation: Forming Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 28,000 Estimated variable manufacturing overhead ($1.80 per MH × 5,000 MHs) 9,000 Estimated total manufacturing overhead cost (a) $ 37,000 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 7.40 /MH Assembly Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 10,500 Estimated variable manufacturing overhead ($2.60 per MH × 5,000 MHs) 13,000 Estimated total manufacturing overhead cost (a) $ 23,500 Estimated total machine-hours (b) 5,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 4.70 /MH Manufacturing overhead applied to Job B: Forming ($7.40 per MH × 3,400 MHs) $ 25,160 Assembly ($4.70 per MH × 2,000 MHs) 9,400 Total manufacturing overhead applied $ 34,560 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

205) Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60 The predetermined overhead rate for the Machining Department is closest to: A) $22.93 per machine-hour B) $6.50 per machine-hour C) $2.10 per machine-hour D) $8.60 per machine-hour

answer: D Explanation: Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $104,000 + ($2.10 per machine-hour × 16,000 machine-hours) = $104,000 + $33,600 = $137,600 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $137,600 ÷ 16,000 machine-hours = $8.60 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

66) Ashe Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,700 $ 9,200 $ 13,900 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.60 During the most recent month, the company started and completed two jobs—Job B and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job B Job K Machining machine-hours 700 300 Customizing machine-hours 1,600 2,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job K is closest to: (Round your intermediate calculations to 2 decimal places.) A) $11,760 B) $1,740 C) $13,716 D) $13,500

answer: D Explanation: Machining Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 4,700 Estimated variable manufacturing overhead ($1.10 per MH × 1,000 MHs) 1,100 Estimated total manufacturing overhead cost (a) $ 5,800 Estimated total machine-hours (b) 1,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 5.80 /MH Customizing Department predetermined overhead rate: Estimated fixed manufacturing overhead $ 9,200 Estimated variable manufacturing overhead ($2.60 per MH × 4,000 MHs) 10,400 Estimated total manufacturing overhead cost (a) $ 19,600 Estimated total machine-hours (b) 4,000 MHs Departmental predetermined overhead rate (a) ÷ (b) $ 4.90 /MH Manufacturing overhead applied to Job K: Machining ($5.80 per MH × 300 MHs) $ 1,740 Customizing ($4.90 per MH × 2,400 MHs) 11,760 Total manufacturing overhead applied $ 13,500 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

Introduction to Managerial Accounting, 8e (Brewer) Chapter 2 Job-Order Costing: Calculating Unit Product Costs 1) A cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes direct costs.

answer: FALSE Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

189) Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Customizing Machine-hours 18,000 13,000 Direct labor-hours 4,000 7,000 Total fixed manufacturing overhead cost $ 113,400 $ 64,400 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 3.90 During the current month the company started and finished Job A319. The following data were recorded for this job: Job A319: Milling Customizing Machine-hours 60 10 Direct labor-hours 20 60 Direct materials $ 655 $ 305 Direct labor cost $ 400 $ 1,200 The amount of overhead applied in the Milling Department to Job A319 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $142,200.00 B) $552.00 C) $96.00 D) $474.00

answer: D Explanation: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $113,400 + ($1.60 per machine-hour × 18,000 machine-hours) = $113,400 + $28,800 = $142,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $142,200 ÷ 18,000 machine-hours = $7.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.90 per machine-hour × 60 machine-hours = $474 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

224) Petty Corporation has two production departments, Milling and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Milling Finishing Machine-hours 20,000 14,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 148,000 $ 88,000 Variable manufacturing overhead per machine-hour $ 1.90 Variable manufacturing overhead per direct labor-hour $ 3.60 The estimated total manufacturing overhead for the Milling Department is closest to: A) $408,000 B) $38,000 C) $148,000 D) $186,000

answer: D Explanation: Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department) = $148,000 + ($1.90 per machine-hour × 20,000 machine-hours) = $148,000 + $38,000 = $186,000 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

48) Juanita Corporation uses a job-order costing system and applies overhead on the basis of direct labor cost. At the end of October, Juanita had one job still in process. The job cost sheet for this job contained the following information: Direct materials $ 480 Direct labor $ 150 Manufacturing overhead applied $ 600 An additional $100 of labor was needed in November to complete this job. For this job, how much should Juanita have transferred to finished goods inventory in November when it was completed? A) $1,330 B) $500 C) $1,230 D) $1,730

answer: D Explanation: Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $600 = Predetermined overhead rate × $150 Predetermined overhead rate = $600 ÷ $150 = 4.0 Direct materials $ 480 Direct labor ($150 + $100) 250 Manufacturing overhead applied (4.0 × $250) 1,000 Total product cost $ 1,730 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

53) Tancredi Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 22,000 $ 11,500 $ 33,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 3.00 During the most recent month, the company started and completed two jobs—Job E and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job E Job J Direct materials $ 12,800 $ 7,000 Direct labor cost $ 17,600 $ 7,700 Machining machine-hours 3,400 1,600 Customizing machine-hours 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. If both jobs are sold during the month, the company's cost of goods sold for the month would be closest to: (Round your intermediate calculations to 2 decimal places.) A) $61,450 B) $41,150 C) $110,808 D) $102,600

answer: D Explanation: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead $ 22,000 Estimated variable manufacturing overhead ($1.80 per MH × 5,000 MHs) 9,000 Estimated total manufacturing overhead cost $ 31,000 Customizing Estimated fixed manufacturing overhead $ 11,500 Estimated variable manufacturing overhead ($3.00 per MH × 5,000 MHs) 15,000 Estimated total manufacturing overhead cost $ 26,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($31,000 + $26,500 = $57,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost $ 57,500 Estimated total machine hours 10,000 MHs Predetermined overhead rate $ 5.75 per MH The overhead applied to Job E is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.75 per MH × (3,400 MHs + 2,000 MHs) = $5.75 per MH × (5,400 MHs) = $31,050 Job E's manufacturing cost: Direct materials $ 12,800 Direct labor cost 17,600 Manufacturing overhead applied 31,050 Total manufacturing cost $ 61,450 The overhead applied to Job J is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job = $5.75 per MH × (1,600 MHs + 3,000 MHs) = $5.75 per MH × (4,600 MHs) = $26,450 Job J's manufacturing cost: Direct materials $ 7,000 Direct labor cost 7,700 Manufacturing overhead applied 26,450 Total manufacturing cost $ 41,150 Total manufacturing cost assigned to Job E $ 61,450 Total manufacturing cost assigned to Job J 41,150 Cost of goods sold $ 102,600 Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

243) Lightner Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 50,000 Estimated variable manufacturing overhead $ 8.82 per machine-hour Estimated total fixed manufacturing overhead $ 1,077,000 Required: Compute the company's predetermined overhead rate.

answer: Estimated total manufacturing overhead = $1,077,000 + ($8.82 per machine-hour × 50,000 machine-hours) = $1,518,000 Predetermined overhead rate = $1,518,000 ÷ 50,000 machine-hours = $30.36 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking;

245) Meenach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 80,000 direct labor-hours, total fixed manufacturing overhead cost of $160,000, and a variable manufacturing overhead rate of $2.30 per direct labor-hour. Recently Job X387 was completed and required 120 direct labor-hours. Required: Calculate the amount of overhead applied to Job X387.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $160,000 + ($2.30 per direct labor-hour × 80,000 direct labor-hours) = $160,000 + $184,000 = $344,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $344,000 ÷ 80,000 direct labor-hours = $4.30 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.30 per direct labor-hour × 120 direct labor-hours = $516 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

253) Mcewan Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 20,000 direct labor-hours, total fixed manufacturing overhead cost of $182,000, and a variable manufacturing overhead rate of $2.50 per direct labor-hour. Job X941, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total direct labor-hours 250 Direct materials $740 Direct labor cost $6,500 Required: Calculate the selling price for Job X941 if the company marks up its unit product costs by 20%.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $182,000 + ($2.50 per direct labor-hour × 20,000 direct labor-hours) = $182,000 + $50,000 = $232,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $232,000 ÷ 20,000 direct labor-hours = $11.60 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.60 per direct labor-hour × 250 direct labor-hours = $2,900 Direct materials $740 Direct labor 6,500 Manufacturing overhead applied 2,900 Total cost of Job X941 $10,140 Total cost of Job X941 (a) $10,140 Number of units (b) 50 Unit product cost (a) ÷ (b) $202.80 Unit product cost for Job X941 $202.80 Markup (20% × $202.80) 40.56 Selling price $243.36 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

269) Franta Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 70,000 direct labor-hours, total fixed manufacturing overhead cost of $238,000, and a variable manufacturing overhead rate of $2.70 per direct labor-hour. Job P873, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: Total direct labor-hours 200 Direct materials $630 Direct labor cost $4,800 Required: Calculate the unit product cost for Job P873.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $238,000 + ($2.70 per direct labor-hour × 70,000 direct labor-hours) = $238,000 + $189,000 = $427,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $427,000 ÷ 70,000 direct labor-hours = $6.10 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $6.10 per direct labor-hour × 200 direct labor-hours = $1,220 Direct materials $630 Direct labor 4,800 Manufacturing overhead applied 1,220 Total cost of Job P873 $6,650 Total cost of Job P873 (a) $6,650 Number of units (b) 50 Unit product cost (a) ÷ (b) $133.00 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

239) Cannizzaro Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 40,000 machine-hours, total fixed manufacturing overhead cost of $248,000, and a variable manufacturing overhead rate of $3.80 per machine-hour. Required: Calculate the predetermined overhead rate for the year.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $248,000 + ($3.80 per machine-hour × 40,000 machine-hours) = $248,000 + $152,000 = $400,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $400,000 ÷ 40,000 machine-hours = $10.00 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

266) Pasko Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 30,000 Total fixed manufacturing overhead cost $258,000 Variable manufacturing overhead per direct labor-hour $2.00 Recently Job P660 was completed with the following characteristics: Number of units in the job 50 Total direct labor-hours 250 Direct materials $645 Direct labor cost $10,000 Required: Calculate the selling price for Job P660 if the company marks up its unit product costs by 20%.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $258,000 + ($2.00 per direct labor-hour × 30,000 direct labor-hours) = $258,000 + $60,000 = $318,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $318,000 ÷ 30,000 direct labor-hours = $10.60 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $10.60 per direct labor-hour × 250 direct labor-hours = $2,650 Direct materials $645 Direct labor 10,000 Manufacturing overhead applied 2,650 Total cost of Job P660 $13,295 Total cost of Job P660 (a) $13,295 Number of units (b) 50 Unit product cost (a) ÷ (b) $265.90 Unit product cost for Job P660 $265.90 Markup (20% × $265.90) 53.18 Selling price $319.08 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

258) Whitlatch Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 60,000 Total fixed manufacturing overhead cost $342,000 Variable manufacturing overhead per machine-hour $2.70 Recently Job M238 was completed with the following characteristics: Number of units in the job 70 Total machine-hours 140 Direct materials $945 Direct labor cost $2,800 Required: Calculate the total job cost for Job M238.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $342,000 + ($2.70 per machine-hour × 60,000 machine-hours) = $342,000 + $162,000 = $504,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $504,000 ÷ 60,000 machine-hours = $8.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.40 per machine-hour × 140 machine-hours = $1,176 Direct materials $945 Direct labor 2,800 Manufacturing overhead applied 1,176 Total cost of Job M238 $4,921 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

238) Crowson Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 50,000 Total fixed manufacturing overhead cost $390,000 Variable manufacturing overhead per machine-hour $3.60 Required: Calculate the predetermined overhead rate for the year.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $390,000 + ($3.60 per machine-hour × 50,000 machine-hours) = $390,000 + $180,000 = $570,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $570,000 ÷ 50,000 machine-hours = $11.40 per machine-hour Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

248) Thrall Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 10,000 Total fixed manufacturing overhead cost $50,000 Variable manufacturing overhead per machine-hour $3.90 Recently Job K125 was completed and required 160 machine-hours. Required: Calculate the amount of overhead applied to Job K125.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $50,000 + ($3.90 per machine-hour × 10,000 machine-hours) = $50,000 + $39,000 = $89,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $89,000 ÷ 10,000 machine-hours = $8.90 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.90 per machine-hour × 160 machine-hours = $1,424 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

268) Petru Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 70,000 Total fixed manufacturing overhead cost $525,000 Variable manufacturing overhead per machine-hour $2.30 Recently Job P987 was completed with the following characteristics: Number of units in the job 20 Total machine-hours 80 Direct materials $630 Direct labor cost $2,080 Required: Calculate the unit product cost for Job P987.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $525,000 + ($2.30 per machine-hour × 70,000 machine-hours) = $525,000 + $161,000 = $686,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $686,000 ÷ 70,000 machine-hours = $9.80 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.80 per machine-hour × 80 machine-hours = $784 Direct materials $630 Direct labor 2,080 Manufacturing overhead applied 784 Total cost of Job P987 $3,494 Total cost of Job P987 (a) $3,494 Number of units (b) 20 Unit product cost (a) ÷ (b) $174.70 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

254) Teasley Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on 70,000 machine-hours, total fixed manufacturing overhead cost of $630,000, and a variable manufacturing overhead rate of $3.40 per machine-hour. Job X159 was recently completed. The job cost sheet for the job contained the following data: Total machine-hours 200 Direct materials $670 Direct labor cost $7,800 Required: Calculate the total job cost for Job X159.

answer: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $630,000 + ($3.40 per machine-hour × 70,000 machine-hours) = $630,000 + $238,000 = $868,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $868,000 ÷ 70,000 machine-hours = $12.40 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $12.40 per machine-hour × 200 machine-hours = $2,480 Direct materials $670 Direct labor 7,800 Manufacturing overhead applied 2,480 Total cost of Job X159 $10,950 Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates; Applying Manufacturing Overhead; Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-01 Compute a predetermined overhead rate.; 02-02 Apply overhead cost to jobs using a predetermined overhead rate.; 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Evaluate AACSB: Analytical Thinking AICPA: BB Reflective Thinking;

1) A cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes direct costs.

answer: FALSE Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 2) Job-order costing systems often use allocation bases that do not reflect how jobs actually use overhead resources. --answer: TRUE Difficulty: 2 Medium Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking; FN Measurement 3) An employee time ticket is an hour-by-hour summary of the employee's activities throughout the day. --answer: TRUE Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

16) A company will improve job cost accuracy by using multiple overhead rates even if it cannot identify more than one overhead cost driver.

answer: FALSE Difficulty: 2 Medium Topic: Job-Order Costing Using Multiple Predetermined Overhead Rates Learning Objective: 02-04 Compute the total cost and the unit product cost of a job using multiple predetermined overhead rates. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

11) In a job-order cost system, indirect labor is assigned to a job using information from the employee time ticket.

answer: FALSE Difficulty: 3 Hard Topic: Computation of Total Job Costs and Unit Product Costs Learning Objective: 02-03 Compute the total cost and the unit product cost of a job using a plantwide predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

7) Actual overhead costs are not assigned to jobs in a job costing system.

answer: TRUE Difficulty: 1 Easy Topic: Applying Manufacturing Overhead Learning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;

3) An employee time ticket is an hour-by-hour summary of the employee's activities throughout the day.

answer: TRUE Difficulty: 1 Easy Topic: Computing Predetermined Overhead Rates Learning Objective: 02-01 Compute a predetermined overhead rate. Bloom's: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking;