Please answer the following multiple-choice questions 1. Rolex Corporation estimates that its production for the coming yearwill be 10,000 units, which is 80% of normal capacity, with thefollowing unit costs:MaterialsDirect laborP4060Direct labor is paid at the rate of P24 per hour. The machine shouldbe run for 20 minutes to produce one unit. Total estimated overheadis expected to consist of P400,000 for variable overhead and P400,000for fixed overhead.What is the predetermined overhead rate base on units of production,using the expected actual capacity activity level?a. P80 per unitb. P75 per unitc. P65 per unitd. P85 per unit2. Using the data in No. 1, what is the predetermined overhead ratebase on material cost?a. 200%b. 150%c. 250%d. 300%3. Using the data in No. 1, what is the predetermined overhead ratebase on direct labor cost?a. 133%b. 153%c. 166%d. 113% 4. Using the data in No. 1, what is the predeternbase on direct labor hours?a. P32 per direct labor hourb. P35 per direct labor hourc. P40 per direct labor hourd. P45 per direct labor hour5. Using the data in No. 1. what is the predetermined overhead ratebase on machine hours?a. P2.40 per machine hourb. P3.00 per machine hourc. P3.50 per machine hourd. P4.00 per machine hour6. Using the data in No. 1, what is the overhead rate base on units ofproduction using the normal capacity activity level?a. P64 per unitb. P70 per unitc. P75 per unitd. P80 per unit7. Using the data in No. 1, what is the overhead rate base on materialcost using the normal capacity activity level?a. 160%b. 155%с. 165%d. 200%8. Using the data in No. 1, what is the overhead rate base on machinehours using the normal capacity activity level?a P92b. Р85с. Р75d. P60

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Business

Accounting

predetermined overhead rate

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...

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Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000. It takes 2 machine hours per unit, direct material cost of $14 per unit, and direct labor of $20 per unit. What is the cost of each unit produced?
1. Golf Corporation estimates that its production for the coming year will be 25,000 units, which is 90% of normal capacity, with the following units costs: Materials P50 Direct labor 90 Direct labor is paid at the rate of P25 per hour. The machine should be run 20 minutes to produce one unit. Total estimated overhead is expected to consist of P900,000 for variable overhead and P900,000 for fixed overhead. g. What is the predetermined overhead rate base on material cost using the normal capacity level? h. What is the overhead rate base on machine hours using the normal capacity activity level?
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