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20) The management of Bullinger Corporation would like to investigate the possibility of basing
its predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 9,000
machine-hours. Capacity is 12,000 machine-hours and the actual level of activity for the year is
assumed to be 7,700 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $11,880 per year. For simplicity, it is assumed that this is the estimated
manufacturing overhead for the year as well as the manufacturing overhead at capacity. It is
further assumed that this is also the actual amount of manufacturing overhead for the year.
If the company bases its predetermined overhead rate on capacity, then the predetermined
overhead rate is closest to:
A) $1.54 per machine-hour
B) $1.32 per machine-hour
C) $1.49 per machine-hour
D) $0.99 per machine-hour
21) The management of Bullinger Corporation would like to investigate the possibility of basing
its predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 9,000
machine-hours. Capacity is 12,000 machine-hours and the actual level of activity for the year is
assumed to be 7,700 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $11,880 per year. For simplicity, it is assumed that this is the estimated
manufacturing overhead for the year as well as the manufacturing overhead at capacity. It is
further assumed that this is also the actual amount of manufacturing overhead for the year.
If the company bases its predetermined overhead rate on capacity, what would be the cost of
unused capacity reported on the income statement prepared for internal management purposes?
A) $2,970
B) $2,541
C) $1,716
D) $4,257
22) Zackery Woodworking Corporation produces fine cabinets. The company uses a job-order
costing system in which its predetermined overhead rate is based on capacity. The capacity of the
factory is determined by the capacity of its constraint, which is an automated lathe. Additional
information is provided below for the most recent month:
Estimates at the beginning of the month:
Estimated total fixed manufacturing overhead
$
7,452
Capacity of the lathe
230
hours
Actual results:
Actual total fixed manufacturing overhead
$
7,452
Actual hours of lathe use
180
hours
The manufacturing overhead applied is closest to:
A) $9,900
B) $5,832
C) $7,748
D) $7,452
23) Zackery Woodworking Corporation produces fine cabinets. The company uses a job-order
costing system in which its predetermined overhead rate is based on capacity. The capacity of the
factory is determined by the capacity of its constraint, which is an automated lathe. Additional
information is provided below for the most recent month:
Estimates at the beginning of the month:
Estimated total fixed manufacturing overhead
$
7,452
Capacity of the lathe
230
hours
Actual results:
Actual total fixed manufacturing overhead
$
7,452
Actual hours of lathe use
180
hours
The cost of unused capacity that would be reported as a period expense on the income statement
prepared for internal management purposes would be closest to:
A) $2,448
B) $296
C) $0
D) $1,620
24) The management of Holdaway Corporation would like to investigate the possibility of basing
its predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 79,000
machine-hours. Capacity is 88,000 machine-hours and the actual level of activity for the year is
assumed to be 74,900 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $5,700,640 per year. For simplicity, it is assumed that this is the estimated
manufacturing overhead for the year as well as the manufacturing overhead at capacity. It is
further assumed that this is also the actual amount of manufacturing overhead for the year.
If the company bases its predetermined overhead rate on capacity, then the predetermined
overhead rate is closest to:
A) $72.16 per machine-hour
B) $70.38 per machine-hour
C) $76.11 per machine-hour
D) $64.78 per machine-hour
25) The management of Holdaway Corporation would like to investigate the possibility of basing
its predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 79,000
machine-hours. Capacity is 88,000 machine-hours and the actual level of activity for the year is
assumed to be 74,900 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $5,700,640 per year. For simplicity, it is assumed that this is the estimated
manufacturing overhead for the year as well as the manufacturing overhead at capacity. It is
further assumed that this is also the actual amount of manufacturing overhead for the year.
If the company bases its predetermined overhead rate on capacity, what would be the cost of
unused capacity reported on the income statement prepared for internal management purposes?
A) $295,856
B) $848,618
C) $583,020
D) $552,762
26) The management of Featheringham Corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. The company's controller has
provided an example to illustrate how this new system would work. In this example, the allocation
base is machine-hours and the estimated amount of the allocation base for the upcoming year is
62,000 machine-hours. Capacity is 75,000 machine-hours and the actual level of activity for the
year is assumed to be 59,000 machine-hours. All of the manufacturing overhead is fixed and both
the estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $2,836,500 per year. It is assumed that a number of jobs were worked on during the
year, one of which was Job Z77W which required 410 machine-hours.
If the company bases its predetermined overhead rate on capacity, then the predetermined
overhead rate is closest to:
A) $48.08 per machine-hour
B) $37.82 per machine-hour
C) $48.91 per machine-hour
D) $45.75 per machine-hour
27) The management of Featheringham Corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. The company's controller has
provided an example to illustrate how this new system would work. In this example, the allocation
base is machine-hours and the estimated amount of the allocation base for the upcoming year is
62,000 machine-hours. Capacity is 75,000 machine-hours and the actual level of activity for the
year is assumed to be 59,000 machine-hours. All of the manufacturing overhead is fixed and both
the estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $2,836,500 per year. It is assumed that a number of jobs were worked on during the
year, one of which was Job Z77W which required 410 machine-hours.
If the company bases its predetermined overhead rate on capacity, then the amount of
manufacturing overhead charged to job Z77W is closest to:
A) $15,506.20
B) $19,065.00
C) $20,051.12
D) $19,711.27
29
28) The management of Featheringham Corporation would like to investigate the possibility of
basing its predetermined overhead rate on activity at capacity. The company's controller has
provided an example to illustrate how this new system would work. In this example, the allocation
base is machine-hours and the estimated amount of the allocation base for the upcoming year is
62,000 machine-hours. Capacity is 75,000 machine-hours and the actual level of activity for the
year is assumed to be 59,000 machine-hours. All of the manufacturing overhead is fixed and both
the estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $2,836,500 per year. It is assumed that a number of jobs were worked on during the
year, one of which was Job Z77W which required 410 machine-hours.
If the company bases its predetermined overhead rate on capacity, what would be the cost of
unused capacity reported on the income statement prepared for internal management purposes?
A) $137,250
B) $605,120
C) $491,660
D) $467,870
29) The management of Plitt Corporation would like to investigate the possibility of basing its
predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 69,000
machine-hours. Capacity is 82,000 machine-hours and the actual level of activity for the year is
assumed to be 72,400 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $4,130,340 per year. It is assumed that a number of jobs were worked on during the
year, one of which was Job Q20L which required 470 machine-hours.
If the company bases its predetermined overhead rate on the estimated amount of the allocation
base for the upcoming year, then the predetermined overhead rate is closest to:
A) $57.05 per machine-hour
B) $60.83 per machine-hour
C) $59.86 per machine-hour
D) $50.37 per machine-hour
30) The management of Plitt Corporation would like to investigate the possibility of basing its
predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 69,000
machine-hours. Capacity is 82,000 machine-hours and the actual level of activity for the year is
assumed to be 72,400 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $4,130,340 per year. It is assumed that a number of jobs were worked on during the
year, one of which was Job Q20L which required 470 machine-hours.
If the company bases its predetermined overhead rate on the estimated amount of the allocation
base for the upcoming year, then the amount of manufacturing overhead charged to Job Q20L is
closest to:
A) $23,673.90
B) $26,812.98
C) $28,589.98
D) $28,134.20
31) The management of Plitt Corporation would like to investigate the possibility of basing its
predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 69,000
machine-hours. Capacity is 82,000 machine-hours and the actual level of activity for the year is
assumed to be 72,400 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $4,130,340 per year. It is assumed that a number of jobs were worked on during the
year, one of which was Job Q20L which required 470 machine-hours.
If the company bases its predetermined overhead rate on capacity, then the predetermined
overhead rate is closest to:
A) $57.05 per machine-hour
B) $59.86 per machine-hour
C) $50.37 per machine-hour
D) $60.83 per machine-hour
32) The management of Plitt Corporation would like to investigate the possibility of basing its
predetermined overhead rate on activity at capacity. The company's controller has provided an
example to illustrate how this new system would work. In this example, the allocation base is
machine-hours and the estimated amount of the allocation base for the upcoming year is 69,000
machine-hours. Capacity is 82,000 machine-hours and the actual level of activity for the year is
assumed to be 72,400 machine-hours. All of the manufacturing overhead is fixed and both the
estimated amount at the beginning of the year and the actual amount at the end of the year are
assumed to be $4,130,340 per year. It is assumed that a number of jobs were worked on during the
year, one of which was Job Q20L which required 470 machine-hours.
If the company bases its predetermined overhead rate on capacity, then the amount of
manufacturing overhead charged to Job Q20L is closest to:
A) $28,589.98
B) $26,592.60
C) $26,812.98
D) $23,673.90
