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Midterm2Practice Key 1 ) The following info have been documented for just lately completed Job 501 about its task cost bed sheet. Direct elements cost was $3, 067.

A total of 30 direct labor-hours and 104 machine-hours were worked on the job. The direct labor wage level is $12 per labor-hour. The company does apply manufacturing overhead on the basis of machinehours. The predetermined overhead charge is $11 per machine-hour. The total expense for the work on its job expense sheet will be: A. $4, 571 N. $3, 757 C. $3, 090 Deb. 3, 427 Applied production overhead sama dengan Predetermined expense rate times Actual machine-hours Applied developing overhead = $11 back button 104 Used manufacturing over head = $1, 144 Total cost = Direct elements + Direct labor + Applied developing overhead Total cost of Job 607 sama dengan $3, 067 + (30 x $12) + $1, 144 = $4, 571 Loraine Organization applies production overhead to jobs using a predetermined cost to do business rate of 70% of direct labor cost. Virtually any underapplied or perhaps overapplied cost to do business cost is closed to Cost of Goods Bought at the end in the month. During August, the subsequent transactions were recorded by the company: installment payments on your

The amount of direct materials price in the August 31 Operate Process inventory account was: A. $10, 200 N. $9, 1000 C. $4, 800 Deb. $4, 2 hundred 3. The expense of Goods Made for Aug was: A. $69, 600 B. $69, 500 C. $76, 900 D. $84, 500 5. The balance upon August you in the Recycleables inventory consideration was: A. $4, 500 B. $7, 000 C. $9, 1000 D. $11, 500 five. Schrick Incorporation. manufactures a variety of products. Varying costing net operating cash flow was $86, 800 a year ago and closing inventory improved by one particular, 900 models. Fixed making overhead price was $6 per product. What was the absorption priced at net operating income recently? A. 86, 800 N. $75, 4 hundred C. $98, 200 M. $11, 400 Fixed making overhead deferred = $6 x you, 900 sama dengan $11, 500 Absorption charging net income = Variable priced at net functioning income & Fixed production overhead deferred = $86, 800 + $11, 400 = $98, 200 6th. Ben Organization produces a individual item. Last year, the company’s net operating income underneath absorption being was $4, 400 lower than under adjustable costing. The organization sold almost 8, 000 units during the year, and its variable costs were $8 per product, of which $3 was adjustable selling expense. Fixed manufacturing overhead was $1 every unit in beginning products on hand under absorption costing.

How many models did the corporation produce in the past year? A. 12, 400 products B. 3, 600 devices C. 7, 120 products D. 7, 450 units Unit set manufacturing overhead = (Difference in salary / Change in inventory) sama dengan $4, four hundred Change in products on hand = $1 Change in inventory = four, 400 units Units created during the year = 8, 1000 units marketed , some, 400 units change in inventory = a few, 600 models Ross Firm produces a individual item. The company features direct supplies costs of $8 per unit, direct labor costs of $6 per product, and making overhead of $10 every unit. Sixty percent of the manufacturing overhead is perfect for fixed costs.

In addition , adjustable selling and administrative costs are $2 per device, and fixed providing and management costs will be $3 every unit with the current activity level. Imagine direct labor is a adjustable cost. 7. Under compression costing, the unit product cost is: A. $24 B. $20 C. $26 D. $29 Unit item cost sama dengan Direct components + Direct labor + Variable manufacturing overhead expense + Set manufacturing over head cost sama dengan $8 + $6 & $10* sama dengan $24 5. Manufacturing over head cost of $12 includes variable and fixed costs. 8. Under variable costing, the unit item cost is: A. $24 B. $20 C. $18 Deb. 21 Device product cost = Immediate materials + Direct labor + Variable manufacturing overhead = $8 + $6 + [$10 back button (100% , 60%)] = $8 + $6 + $4= $18 9. Viren Company has supplied the following info from its activity-based costing program: The company makes 240 units of item T91H 12 months, requiring an overall total of 550 machine-hours, 80 orders, and 40 inspection-hours per year. The product’s direct materials cost is $16. 98 per unit and its direct labor expense is $12. 2009 per product. According to the activity-based costing program, the average cost of product T91H is best to: A. $79. sixty six per device B. 85. 81 per unit C. $29. 07 per product D. $75. 70 every unit 10. Data concerning three with the activity expense pools of Bramhall LLC, a legal organization, have been offered below: The activity rate for the “meeting with clients” activity price pool is definitely closest to: A. $125 per getting together with hour N. $65 every meeting hour C. $80 per appointment hour M. $665, five-hundred per meeting hour Kleppe Corporation features provided the following data from the activity-based priced at accounting program: The “Other” activity price pool consists of the costs of idle ability and organization-sustaining costs that are not assigned to products. 1 ) How much roundabout factory pay and manufacturing plant equipment depreciation cost would be assigned to the consumer Orders activity cost pool? A. $240, 000 N. $72, 500 C. $68, 000 D. $480, 1000 12. Simply how much indirect manufacturer wages and factory products depreciation price would NOT always be assigned to products using the activity-based priced at system? A. $0 N. $68, 500 C. $280, 000 D. $200, 500 13. In this problem, you will find three feasible overhead share bases: direct labor (present system), machine hours (the proposed system), and range of batches.

Initially, calculate product costs beneath each of the three allocation strategies: (a). Immediate labor expense as the allocation bottom (present system): Bluethings a hundred and twenty, 000. 55 $60, 1000 95. 238% 342, 857 60, 500 $462, 857 $ a few. 857 Graythings 6, 1000. 50 $3, 000 5. 762% 18, 143 3, 000 $23, 143 bucks 3. 857 Total 126, 000 Number of units Immediate labor/unit Immediate labor cost % of total immediate labor cost Overhead allotted Direct material cost Total cost Unit cost $63, 000 360, 000 63, 000 $486, 000 (b). Machine several hours as the allocation bottom (proposed system): Bluethings 120, 000 six-hundred 200 20 4000 96. 38% $342, 857 70, 000 70, 000 $462, 857 dollar 3. 857 Graythings 6, 000 30 200 you 200 5. 762% $17, 143 3, 000 a few, 000 $23, 143 bucks 3. 857 Total 126, 000 Number of units/year? number of units/batch Volume of batches/year by number of hours per group Number of equipment hours/year % of total machine several hours Overhead allotted Direct labor cost Immediate material cost Total cost Unit cost 4200 $360, 000 63, 000 63, 000 $486, 000 (c). Number of amounts as the allocation base: Bluethings one hundred twenty, 000 600 200 50 percent $180, 000 60, 1000 60, 000 $300, 500 $2. 60 Graythings 6, 000 40 200 50% $180, 1000 3, 1000 3, 1000 $186, 1000 $31. zero Total 126, 000 500 Number of units/year? number of units/batch Number of batches/year % of total batches Overhead given Direct labor cost Direct material cost Total expense Unit cost $360, 000 63, 000 63, 000 $486, 1000 Notice that allocating overhead by simply either immediate labor or machine hours produces similar product costs. Thus, the proposed program change will not likely affect making decisions. There are two cost individuals in Set-up Company. Unit volume pushes direct supplies and immediate labor, but set-ups (number of batches) appear to drive overhead costs.

Allocating overhead employing direct labor gives the wrong impression showing how overhead costs differ and distorts product costs. Overhead costs are incurred in setups. When run moments per unit of point is the same for doldrums and grays, batch sizes differ significantly. In fact , bluethings and graythings each essential 200 batches. Therefore , every product line (as opposed to every single unit of product) needs to be allocated an equal dollar amount of overhead. If this is done, then graythings turn into massive losers and bluethings are seen being profitable, in spite of market price of $3 every unit.