Brent, Inc., manufactures wool sweaters. Costs incurred in making 55,000 sweaters in August included $330,000 of fixed manufacturing overhead. The total absorption cost per sweater was$38.60. Required: a. Calculate the variable cost per sweater.

Creative Lighting, Inc., makes specialty table lamps. Manufacturing overhead is applied to production on a direct abor hours basis. During June, the first month of the company’s fiscal year, $56,520 of manufacturing overhead was applied to Work in Process Inventory using the predetermined overhead application rate of$6 per direct labor hour.

Required: d. Explain the accounting appropriate for the over- or underapplied overhead at the end of June.

For each of the following costs, check the columns that most likely apply (both variable and fixed might apply for some costs)

Creative Lighting, Inc., makes specialty table lamps. Manufacturing overhead is applied to production on a direct abor hours basis. During June, the first month of the company’s fiscal year, $56,520 of manufacturing overhead was applied to Work in Process Inventory using the predetermined overhead application rate of$6 per direct labor hour.

Required: c. Identify two possible explanations for the over- or underapplied overhead.

Creative Lighting, Inc., makes specialty table lamps. Manufacturing overhead is applied to production on a direct abor hours basis. During June, the first month of the company’s fiscal year, $56,520 of manufacturing overhead was applied to Work in Process Inventory using the predetermined overhead application rate of$6 per direct labor hour.

Required: b. Actual manufacturing overhead costs incurred during June totaled $49,340. Calculate the amount of over- or underapplied overhead for June.

Creative Lighting, Inc., makes specialty table lamps. Manufacturing overhead is applied to production on a direct abor hours basis. During June, the first month of the company’s fiscal year, $56,520 of manufacturing overhead was applied to Work in Process Inventory using the predetermined overhead application rate of$6 per direct labor hour.

Required: a. Calculate the number of hours of direct labor used during June.

Checker, Inc., produces automobile bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $18.50 per machine hour was established for 2013.

Required: c. Explain the accounting necessary for the over- or underapplied overhead for the year.

Checker, Inc., produces automobile bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $18.50 per machine hour was established for 2013.

Required: b. Actual overhead incurred during 2013 totaled$229,400, and 12,200 machine hours were used during 2013. Calculate the amount of over- or underapplied overhead for 2013.

Checker, Inc., produces automobile bumpers. Overhead is applied on the basis of machine hours required for cutting and fabricating. A predetermined overhead application rate of $18.50 per machine hour was established for 2013.

Required: a. If 12,000 machine hours were expected to be used during 2013, how much overhead was expected to be incurred?

Nautical Accessories, Inc., manufactures women’s boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2013, it was estimated that manufacturing overhead would total $359,520 and that 21,400 machine hours would be used.

Required: c. At the end of April, 1,050 hats were in ending inventory. Calculate the cost of the ending inventory and the cost of the hats sold during April.

Nautical Accessories, Inc., manufactures women’s boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2013, it was estimated that manufacturing overhead would total $359,520 and that 21,400 machine hours would be used.

Required: b. During April, 3,900 hats were made. Raw materials costing$6,240 were used, and direct labor costs totaled $9,165. A total of 780 machine hours were worked during the month of April. Calculate the cost per hat made during April..

Following are a number of key terms and concepts introduced in the chapter, along with a list of corresponding definitions. Match the appropriate letter for the key term or concept to each definition provided (items 1–14). Note that not all key terms and concepts will be used. Answers are provided at the end of this chapter.

____ 1. A product costing method by which only variable manufacturing costs are included in product cost.

Nautical Accessories, Inc., manufactures women’s boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2013, it was estimated that manufacturing overhead would total $359,520 and that 21,400 machine hours would be used.

Required: a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2013.

Overhead is most often applied to production on the basis of a. direct labor hours. b. machine hours. c. raw material usage. d. number of units made. e. direct labor costs.