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75.
In computing its predetermined overhead rate, Stiles Company inadvertently left its
indirect labor costs out of the computation. This oversight will cause:
76.
Which of the following is the correct formula to compute the predetermined overhead
rate?
77.
Which of the following would probably be the least appropriate allocation base for
allocating overhead in a highly automated manufacturer of specialty valves?
78.
79.
The Work in Process inventory account of a manufacturing firm shows a balance of $3,000
at the end of an accounting period. The job cost sheets of two uncompleted jobs show
charges of $500 and $300 for materials, and charges of $400 and $600 for direct labor.
From this information, it appears that the company is using a predetermined overhead
rate, as a percentage of direct labor costs, of:
80.
Markham Corporation uses a job-order costing system. The following data are for last
year:
Estimated direct labor-hours
12,000
Estimated manufacturing overhead
costs
$39,000
Actual direct labor-hours
11,000
Actual manufacturing overhead costs
$37,000
Markham applies overhead using a predetermined rate based on direct labor-hours. What
predetermined overhead rate was used last year?
81.
Hyu Corporation bases its predetermined overhead rate on the estimated labor-hours for
the upcoming year. At the beginning of the most recently completed year, the company
estimated the labor-hours for the upcoming year at 52,000 labor-hours. The estimated
variable manufacturing overhead was $2.78 per labor-hour and the estimated total fixed
manufacturing overhead was $1,192,360. The actual labor-hours for the year turned out to
be 52,600 labor-hours. The predetermined overhead rate for the recently completed year
was closest to:
82.
Marvel Company uses a predetermined overhead rate in applying overhead to production
orders on a labor cost basis in Department A and on a machine-hours basis in Department
B. At the beginning of the most recently completed year, the company made the following
estimates:
Dept. A
Dept. B
Direct labor cost
$56,000
$33,000
Factory overhead
$67,200
$45,000
Direct labor-hours
8,000
9,000
Machine-hours
4,000
15,000
What predetermined overhead rate would be used in Department A and Department B,
respectively?
83.
Moore Corporation bases its predetermined overhead rate on the estimated machine-
hours for the upcoming year. Data for the most recently completed year appear below:
Estimates made at the
beginning of the year:
Estimated machine-hours
19,000
Estimated variable
manufacturing overhead
$7.89
per
machine-
hour
Estimated total fixed
manufacturing overhead
$465,880
Actual machine-hours for
the year
20,200
84.
85.
The predetermined overhead rate for manufacturing overhead for Ashland Corporation
was $8.00 per direct labor hour. The estimated labor rate was $10.00 per hour. If the
estimated direct labor cost was $150,000, what was the estimated manufacturing
overhead?
86.
The Crater Company uses predetermined overhead rates to apply manufacturing overhead
to jobs. The predetermined overhead rate is based on labor cost in Dept. A and machine-
hours in Dept. B. At the beginning of the year, the company made the following estimates:
Dept A
Dept B
Direct labor cost
$65,000
$42,000
Manufacturing overhead
$91,000
$48,000
Direct labor-hours
8,000
10,000
Machine-hours
3,000
12,000
87.
88.
Horton Industries Company uses a predetermined overhead rate based on machine-hours
to apply manufacturing overhead to jobs. The company has provided the following
estimated costs for next year:
Direct materials
$10,000
Direct labor
$30,000
Sales commissions
$40,000
Salary of production supervisor
$20,000
Indirect materials
$4,000
Advertising expense
$8,000
Rent on factory equipment
$10,000
89.
Spring Corporation bases its predetermined overhead rate on the estimated machine-
hours for the upcoming year. Data for the upcoming year appear below:
Estimated machine-
hours
70,000
Estimated variable
manufacturing overhead
$6.68
per
machine-
hour
Estimated total fixed
manufacturing overhead
$1,283,800
90.
6-77
91.
Job 731 was recently completed. The following data have been recorded on its job cost
sheet:
Direct materials
$2,391
Direct labor-hours
69
labor-hours
Direct labor wage rate
$13
per labor-hour
Machine-hours
129
machine-hours
The company applies manufacturing overhead on the basis of machine-hours. The
predetermined overhead rate is $14 per machine-hour. The total cost that would be
recorded on the job cost sheet for Job 731 would be:
92.
Under Pierre Company's job-order costing system, manufacturing overhead is applied to
Work in Process inventory using a predetermined overhead rate. During January, Pierre's
transactions included the following:
Direct materials issued
to production
$90,000
Indirect materials
issued to production
$8,000
Manufacturing
overhead cost incurred
$125,000
Manufacturing
overhead cost applied
$113,000
Direct labor cost
incurred
$107,000
93.
94.
