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 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
$
11,500
$
9,000
$
18,400
$
7,400
700
300
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:
A) $15,310
B) $47,767
C) $30,620
D) $45,930
Estimated fixed manufacturing overhead
$
4,800
Estimated variable manufacturing overhead ($1.80
per MH × 1,000 MHs)
Estimated total manufacturing overhead cost (a)
$
6,600
Estimated total machine-hours (b)
1,000
MHs
Departmental predetermined overhead rate (a) ÷ (b)
per
MH
223
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
225
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
227
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:
A) $2,206
B) $616
C) $4,076
D) $1,870
229
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
AICPA: BB Critical Thinking; FN Measurement
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
230
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
231
232
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
234
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:
A) $1,405
B) $2,000
C) $810
D) $595
235
236
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:
A) $810
B) $4,275
C) $2,060
D) $2,215
238
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:
A) $4,275.00
B) $5,643.00
C) $5,130.00
D) $855.00
240
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:
A) $90,707
B) $27,487
C) $82,461
D) $54,974