predetermined overhead rate
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please answer the following multiple-choice questions
Transcribed Image Text:1. Rolex Corporation estimates that its production for the coming year
will be 10,000 units, which is 80% of normal capacity, with the
following unit costs:
Materials
Direct labor
P40
60
Direct labor is paid at the rate of P24 per hour. The machine should
be run for 20 minutes to produce one unit. Total estimated overhead
is expected to consist of P400,000 for variable overhead and P400,000
for fixed overhead.
What is the predetermined overhead rate base on units of production,
using the expected actual capacity activity level?
a. P80 per unit
b. P75 per unit
c. P65 per unit
d. P85 per unit
2. Using the data in No. 1, what is the predetermined overhead rate
base on material cost?
a. 200%
b. 150%
c. 250%
d. 300%
3. Using the data in No. 1, what is the predetermined overhead rate
base on direct labor cost?
a. 133%
b. 153%
c. 166%
d. 113%
Transcribed Image Text:4. Using the data in No. 1, what is the predetern
base on direct labor hours?
a. P32 per direct labor hour
b. P35 per direct labor hour
c. P40 per direct labor hour
d. P45 per direct labor hour
5. Using the data in No. 1. what is the predetermined overhead rate
base on machine hours?
a. P2.40 per machine hour
b. P3.00 per machine hour
c. P3.50 per machine hour
d. P4.00 per machine hour
6. Using the data in No. 1, what is the overhead rate base on units of
production using the normal capacity activity level?
a. P64 per unit
b. P70 per unit
c. P75 per unit
d. P80 per unit
7. Using the data in No. 1, what is the overhead rate base on material
cost 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 machine
hours using the normal capacity activity level?
a P92
b. Р85
с. Р75
d. P60
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
1. Formula for calculating predetermined overhead rate based on expected activity level
VIEWCalculation of predetermined overhead rate based on expected activity level
VIEW2. Formula to calculate predetermined overhead rate based on material cost
VIEWCalculation of predetermined overhead rate based on material cost
VIEW3. Formula to calculate predetermined overhead rate based on direct labor cost
VIEWCalculation of predetermined overhead rate based on direct labor cost
VIEW
Step by step
Solved in 6 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education