Question

72) Keeran Corporation estimates that its variable manufacturing overhead is $5.20 per machine-hour and its fixed manufacturing overhead is $242,048 per period.

If the denominator level of activity is 6,200 machine-hours, the predetermined overhead rate would be:

A) $520.00 per machine-hour

B) $5.20 per machine-hour

C) $44.24 per machine-hour

D) $39.04 per machine-hour

73) Fleming Incorporated makes a single product—a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Budgeted fixed manufacturing overhead

$

190,485

Budgeted production (a)

15,000

units

Standard hours per unit (b)

1.70

labor-hours

Budgeted hours (a) × (b)

25,500

labor-hours

Actual production (a)

10,000

units

Standard hours per unit (b)

1.70

labor-hours

Standard hours allowed for the actual production (a) × (b)

17,000

labor-hours

Actual fixed manufacturing overhead

$

172,485

Actual hours

16,000

labor-hours

The fixed overhead budget variance is:

A) $18,000 U

B) $18,000 F

C) $45,495 U

D) $45,495 F

74) Fleming Incorporated makes a single product—a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Budgeted fixed manufacturing overhead

$

190,485

Budgeted production (a)

15,000

units

Standard hours per unit (b)

1.70

labor-hours

Budgeted hours (a) × (b)

25,500

labor-hours

Actual production (a)

10,000

units

Standard hours per unit (b)

1.70

labor-hours

Standard hours allowed for the actual production (a) × (b)

17,000

labor-hours

Actual fixed manufacturing overhead

$

172,485

Actual hours

16,000

labor-hours

The fixed overhead volume variance is:

A) $63,495 U

B) $45,495 F

C) $45,495 U

D) $63,495 F

75) Tantanka Manufacturing Corporation uses a standard cost system with machine-hours as the activity base for overhead. The following information relates to production for last year:

Variable

Fixed

Total budgeted overhead (at denominator level of activity)

$

432,000

$

684,000

Total applied overhead

$

410,400

$

649,800

Total actual overhead

$

456,000

$

655,500

The standard machine-hours allowed for actual output during the year were 7,600. The actual machine-hours incurred were 7,500.

What did Tantanka use as a predetermined overhead rate for fixed manufacturing overhead?

A) $85.50 per machine-hour

B) $86.64 per machine-hour

C) $87.40 per machine-hour

D) $90.00 per machine-hour

78) Fredin Incorporated makes a single product—an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Budgeted (Planned) Overhead:

Budgeted variable manufacturing overhead

$

80,400

Budgeted fixed manufacturing overhead

185,700

Total budgeted manufacturing overhead

$

266,100

Budgeted production (a)

15,000

units

Standard hours per unit (b)

2.00

labor-hours

Budgeted hours (a) × (b)

30,000

labor-hours

The predetermined overhead rate is closest to:

A) $22.76 per labor-hour

B) $11.38 per labor-hour

C) $17.74 per labor-hour

D) $8.87 per labor-hour

79) Fredin Incorporated makes a single product—an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Budgeted (Planned) Overhead:

Budgeted variable manufacturing overhead

$

80,400

Budgeted fixed manufacturing overhead

185,700

Total budgeted manufacturing overhead

$

266,100

Budgeted production (a)

15,000

units

Standard hours per unit (b)

2.00

labor-hours

Budgeted hours (a) × (b)

30,000

labor-hours

The variable component of the predetermined overhead rate is closest to:

A) $2.68 per labor-hour

B) $3.02 per labor-hour

C) $2.93 per labor-hour

D) $2.41 per labor-hour

80) Fredin Incorporated makes a single product—an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Budgeted (Planned) Overhead:

Budgeted variable manufacturing overhead

$

80,400

Budgeted fixed manufacturing overhead

185,700

Total budgeted manufacturing overhead

$

266,100

Budgeted production (a)

15,000

units

Standard hours per unit (b)

2.00

labor-hours

Budgeted hours (a) × (b)

30,000

labor-hours

The fixed component of the predetermined overhead rate is closest to:

A) $16.73 per labor-hour

B) $6.19 per labor-hour

C) $8.36 per labor-hour

D) $12.38 per labor-hour

81) A manufacturer of playground equipment has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

  

Denominator level of activity

5,800

DLHs

Fixed overhead cost

$

58,870

The following data pertain to operations for the most recent period:

Actual hours

6,100

DLHs

Standard hours allowed for the actual output

6,018

DLHs

Actual total fixed manufacturing overhead cost

$

58,320

  

The predetermined fixed manufacturing overhead rate is closest to:

A) $10.15 per MH

B) $9.56 per MH

C) $9.65 per MH

D) $10.06 per MH

please answer all 8 Questions, Thank you so much!

Answer 1

Keeran Corporation : D) $39.04 per machine-hour

Predetermined Overhead Rate = Fixed Manufacturing Overhead / machine-hours = $242,048 / 6200 = $39.04

Fleming Incorporated : B) $18,000 F

The fixed overhead budget variance is:

Budget variance = Actual fixed overhead – Budgeted fixed overhead = $172,485 – $190,485 = $18,000 F

The fixed overhead volume variance is: $63,495 U

Fixed component of the predetermined overhead rate = $190,485/25,500 labor-hours = $7.47 per labor-hour

Volume variance = Budgeted fixed overhead – Fixed overhead applied to work in process

                        = $190,485 – ($7.47 per labor-hour × 17,000 labor-hours)

                        = $190,485 – ($126,990)

                        = $63,495 U

Tantanka Manufacturing Corporation :$85.50 per hour

Applied fixed manufacturing overhead = Predetermined overhead rate for fixed manufacturing overhead × Standard hours allowed for the actual output = $649,800 = Predetermined overhead rate for fixed manufacturing overhead × 7,600 hours

Predetermined overhead rate for fixed manufacturing overhead = $649,800 ÷ 7,600 hours = $85.50 per hour

Fredin Incorporated : $8.87 per labor-hour

Predetermined overhead rate = $266,100/30,000 labor-hours = $8.87 per labor-hour

Fixed component of the predetermined overhead rate = $185,700/30,000 labor-hours = $6.19 per labor-hour

Playground Equipment :$10.15 per MH

Predetermined overhead rate = Budgeted total overhead ÷ Denominator level of activity = $58,870 ÷ 5,800 MHs = $10.15 per MH