Question

1.

West Company estimates that overhead costs for the next year will be $3,300,000 for indirect labor and $900,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 96,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?

Multiple Choice

$0.0229 per machine hour.

$34.38 per machine hour.

$43.75 per machine hour.

$9.38 per machine hour.

$0.1067 per machine hour.

2.

K Company estimates that overhead costs for the next year will be $3,800,000 for indirect labor and $970,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 106,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate?

Multiple Choice

$0.02 per direct labor hour.

$45.00 per direct labor hour.

$35.85 per direct labor hour.

$9.15 per direct labor hour.

$0.11 per direct labor hour.

3.

A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:

				Budgeted Activity
Activity Cost Pool	Budgeted Cost			Product A1			Product B2
Activity 1	$	55,000			1,900			5,500
Activity 2	$	70,000			2,940			5,460
Activity 3	$	94,000			7,900			1,500

Annual production and sales level of Product A1 is 9,180 units, and the annual production and sales level of Product B2 is 23,010 units. What is the approximate overhead cost per unit of Product A1 under activity-based costing?

Multiple Choice

$7.43

$8.33

$10.00

$12.81

$4.41

4.

ake Erie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 566,667 units are expected to be produced taking .75 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Estimated:	Department 1			Department 2
Manufacturing overhead costs	$	3,107,500		$	1,520,000
Direct labor hours		150,000	DLH		250,000	DLH
Machine hours		250,000	MH		175,000	MH

rev: 09_11_2017_QC_CS-99527

Multiple Choice

$11.57 per unit

$8.17 per unit

$5.61 per unit

$12.43 per unit

$10.89 per unit

5.

Flannigan Company manufactures and sells a single product that sells for $540 per unit; variable costs are $324. Annual fixed costs are $836,000. Current sales volume is $4,290,000. Compute the contribution margin per unit.

Multiple Choice

$540.

$324.

$240.

$230.

$216.

Answer 1