Question

	Jan 15 Work in Process 168,000 Factory Overhead 168,000
	Jan 15 Work in Process 168,000 Cash 168,000 Jan 15 Materials 168,000 Work in Process 168,000 Jan 15 Work in Process 168,000 Materials 168,000 A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $675,000 and direct labor hours would be 45,000. Actual factory overhead costs incurred were $725,000, and actual direct labor hours were 48,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? $5,000 underapplied $45,000 overapplied $45,000 underapplied $5,000 overpplied *Given the following cost and activity observations for Bounty Company’s utilities, Bounty’ variable utilities costs per machine hour is equal to:                                                                                  Total cost                                         Machine Hours March                                                                        6200                                                    30,000 April                                                                            5,400                                                    20,000 May                                                                            5,800                                                     24,000 June                                                                           7,600                                                      32,000 $0.11 $0.11 $0.27 $0.20 ABC Company sells 25,000 units at $25 per unit. Variable costs are $15 per unit, and fixed costs are $75,000. The contribution margin ratio and the unit contribution margin are: 40% and $10 per unit 40% and $15 per unit 60% and $15 per unit 60% and $10 per unit Bobby Co. sells two products, X and Y. Last year, Bobby sold 18,000 units of X's and 12,000 units of Y's. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products are provided below. Product                selling price            variable cost per unit                          contribution margin x                                180                       100                                                            80 Y                                100                        60                                                             40

Answer 1

1)correct option is "A" -- 5000 underapplied

Actual overhead = 725000

Predetermined overhead : 675000/ 45000 = $ 15 per DLH

Applied overhead : 15*48000 = 720000

underapplied overhead 725000-720000= 5000

2)Highest activity 32000 hours - 7600

lowest activity 20000 - 5400

variable cost =change in cost /change in hours

              [7600-5400]/[32000-20000]

              2200/12000

                $ .18 per hour

none of option given is correct]

3)correct option is "A"

Unit contribution margin : price -variable cost

              = 25-15

                = 10

contribution margin ratio = 10/25 =.40 or 40%