Question

The Little League Baseball Manufacturer purchases materials for the production of customized little league baseball bats, hires workers to convert the materials to customized finished baseball bats, and then offers the customized baseball bats for sale to little league teams and the general public.

1.   Refer to Little League Baseball Manufacturer.

Manufacturing costs such as the cost of production supervisors overseeing the production of several different products fall into which of the following categories?

a.	direct material costs.
b.	direct labor costs.
c.	manufacturing overhead costs.
d.	opportunity costs.

2.   Refer to Little League Baseball Manufacturer.

Manufacturing costs such as depreciation and insurance for the factory building, as well as heat, light, power, and similar expenses incurred to keep the factory operating, fall into which of the following categories?

a.	direct material costs.
b.	direct labor costs.
c.	manufacturing overhead costs.
d.	opportunity costs.

3.   Under normal costing, the Predetermined Manufacturing Overhead Rate equals

a.	Actual Manufacturing Overhead divided by the Actual Activity Level.
b.	Actual Manufacturing Overhead divided by the Normal (or Estimated) Activity Level.
c.	Estimated Manufacturing Overhead divided by the Normal (or Estimated) Activity Level.
d.	None of the answers is correct.

Answer 1

1) Manufacturing costs such as the cost of production supervisors overseeing the production of several different products fall into which of the following categories?

Solution: manufacturing overhead costs.

Explanation: Manufacturing overhead includes a company's factory operations

2) Manufacturing costs such as depreciation and insurance for the factory building, as well as heat, light, power, and similar expenses incurred to keep the factory operating, fall into which of the following categories

Solution: manufacturing overhead costs

Explanation: Examples of costs that are included in the manufacturing overhead category are: Depreciation and insurance of equipment in the process of production

3) Under normal costing, the Predetermined Manufacturing Overhead Rate equals

Solution: Estimated Manufacturing Overhead divided by the Normal (or Estimated) Activity Level.

Explanation: The normal costing system the cost of job equals estimated overhead cost divided by Normal (or Estimated) activity level for a period