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
C
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.
B
Which of the following would usually be found on a job cost sheet under a normal cost system?

Actual direct material cost Actual manufacturing overhead cost
A) Yes Yes
B) Yes No
C) No Yes
D) No No

A) Choice A
B) Choice B
C) Choice C
D) Choice D
B
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
A
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
B
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
B
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
D
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
A
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
C
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
B
13) Dejarnette 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 the following data: Total machine-hours: 80,000 Total fixed manufacturing overhead cost: $ 416,000 Variable manufacturing overhead per machine-hour: $ 3.10 The predetermined overhead rate is closest to: A) $8.30 per machine-hour B) $11.40 per machine-hour C) $5.20 per machine-hour D) $3.10 per machine-hourAKrier Corporation uses a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $738,000 and 30,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $792,000 and 31,500 total direct labor- hours during the period. The predetermined overhead rate is closest to: A) $26.40 B) $25.14 C) $23.43 D) $24.60DLueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed: Number of units in the job: 40 Total direct labor-hours: 80 Direct materials: $950 Direct labor cost: $2,720 The unit product cost for Job T498 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $55.38 B) $42.75 C) $91.75 D) $110.75D