Q.1 Tech Nova Manufacturing Inc. estimates that overhead costs for the next year will be $3,600,000 for indirect labor and $1,200,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 150,000 machine hours are planned for the next year, what is the company's plant wide overhead rate? a) $30.00 per machine hour b) $26.00 per machine hour c) $38.67 per machine hour d) $36.00 per machine hour Q.2 Vertex Solutions Inc. provides the following information for the current month: Item Purchases Purchases Discounts Amount ($) 50,000 2,000 Merchandise Inventory (Jan 1) 5,000 Merchandise Inventory (Jan 31) 8,000 Sales Returns and Allowances 1,500 Sales 90,000 Purchases Returns and Allowances 2,500 Freight In 1,500 What is the amount of net sales? Q.3 Summit Technologies Ltd. has fixed costs of $350,000 and a profit of $150,000. What is its degree of operating leverage? a) 0.75 b) 1.2 c) 1.5 d) 2.0

Q.1 Tech Nova Manufacturing Inc. estimates that overhead costs for the next year will be $3,600,000 for indirect labor and $1,200,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 150,000 machine hours are planned for the next year, what is the company's plant wide overhead rate? a) $30.00 per machine hour b) $26.00 per machine hour c) $38.67 per machine hour d) $36.00 per machine hour Q.2 Vertex Solutions Inc. provides the following information for the current month: Item Purchases Purchases Discounts Amount ($) 50,000 2,000 Merchandise Inventory (Jan 1) 5,000 Merchandise Inventory (Jan 31) 8,000 Sales Returns and Allowances 1,500 Sales 90,000 Purchases Returns and Allowances 2,500 Freight In 1,500 What is the amount of net sales? Q.3 Summit Technologies Ltd. has fixed costs of $350,000 and a profit of $150,000. What is its degree of operating leverage? a) 0.75 b) 1.2 c) 1.5 d) 2.0

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 4CMA: Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and...

See similar textbooks

Similar questions

A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
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?
A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
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?
If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?
Cozy, Inc., manufactures small and large blankets. It estimates $350,000 in overhead during the manufacturing of 75,000 small blankets and 25,000 large blankets. What is the predetermined overhead rate if a small blanket takes 1 machine hour and a large blanket takes 2 machine hours?
Event Forms expects $120,000 in overhead during the next year. It doesn't know whether it should apply overhead on the basis of its anticipated direct labor hours of 6,000 or its expected machine hours of 5,000. What would be the product cost under each predetermined allocation rate if the last job incurred $3,500 in direct material cost, 55 direct labor hours, and 55 machine hours? Wages are paid at $17 per hour.
Pocono Cement Forms expects $900,000 in overhead during the next year. It does not know whether it should apply overhead on the basis of its anticipated direct labor hours of 60,000 or its expected machine hours of 30,000. Determine the product cost under each predetermined allocation rate if the last job incurred $1,550 in direct material cost, 90 direct labor hours, and 75 machine hours. Wages are paid at $16 per hour.