# Accounting Chapter 16

In a job-order costing system that is based on machine-hours, which of the following formulas
is correct?
A) Predetermined overhead rate = Actual manufacturing overhead ÷ Actual machine-hours
B) Predetermined overhead rate = Actual manufacturing overhead ÷ Estimated machine-hours
C) Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-
hours
D) Predetermined overhead rate = Estimated manufacturing overhead ÷ Actual machine-hours
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In a job-order costing system that is based on machine-hours, which of the following formulas
is correct?
A) Predetermined overhead rate = Actual manufacturing overhead ÷ Actual machine-hours
B) Predetermined overhead rate = Actual manufacturing overhead ÷ Estimated machine-hours
C) Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-
hours
D) Predetermined overhead rate = Estimated manufacturing overhead ÷ Actual machine-hours
Assigning manufacturing overhead to a specific job is complicated by all of the below except:
A) Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a
particular job.
B) Manufacturing overhead is incurred only to support some jobs.
C) Manufacturing overhead consists of both variable and fixed costs.
D) The average cost of actual fixed manufacturing overhead expenses will vary depending on
how many units are produced in a period.
Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for
the next year:

Direct materials: $6,000 Direct labor:$ 20,000
Rent on factory building: $15,000 Sales salaries:$ 25,000
Depreciation on factory equipment: $8,000 Indirect labor:$ 12,000
Production supervisor's salary: $15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: A)$2.50 per direct labor-hour
B) $2.79 per direct labor-hour C)$3.00 per direct labor-hour
D) $4.00 per direct labor-hour Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of$121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to: A)$10.37
B) $12.10 C)$11.10
D) $11.30 Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 36,000 Estimated variable manufacturing overhead$ 3.01 per machine-hour
Estimated total fixed manufacturing overhead $1,058,040 The predetermined overhead rate for the recently completed year was closest to: A)$29.39 per machine-hour
B) $32.40 per machine-hour C)$32.81 per machine-hour
D) $3.01 per machine-hour Valvano Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of$440,000, variable manufacturing overhead of $2.20 per machine-hour, and 50,000 machine-hours. The estimated total manufacturing overhead is closest to: A)$440,000
B) $110,000 C)$440,002
D) $550,000 Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of$492,000 and 30,000 machine-hours for the period. The
company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.) A)$464,120
B) $492,000 C)$487,703
D) $25,000 10) Thach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of$665,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. Recently, Job T321 was completed with the following characteristics: Number of units in the job: 30 Total machine-hours: 90 Direct materials:$ 630
Direct labor cost: $2,880 The unit product cost for Job T321 is closest to: A)$117.00
B) $58.50 C)$154.50
D) $51.50 11) Coates Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of$249,000, variable manufacturing overhead of $3.80 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job X784 which was recently completed: Number of units in the job: 50 Total machine-hours: 250 Direct materials:$ 470
Direct labor cost: $5,500 If the company marks up its unit product costs by 30% then the selling price for a unit in Job X784 is closest to: (Round your intermediate calculations to 2 decimal places.) A)$253.87
B) $233.87 C)$53.97
D) \$155.22