Question

28)

A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (19,600 units):
Direct materials	$183,900
Direct labor	233,800
Variable factory overhead	254,500
Fixed factory overhead	90,700	$762,900
Operating expenses:
Variable operating expenses	$124,400
Fixed operating expenses	46,700	171,100

If 1,900 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is

a.$73,955

b.$65,151

c.$77,221

d.$90,541

27)

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent.

	Cost	Machine Hours
March	$3,127	14,922
April	2,646	10,410
May	2,858	12,104
June	3,620	17,543

a.$1.37

b.$0.78

c.$0.82

d.$0.14

26)

Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below.

Product	Number of Units	Direct Labor Hours Per Unit	Machine Hours Per Unit
Rings	1,180	6	3
Dings	2,710	9	7

All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $80,400. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $71,900.

Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours.

The total factory overhead allocated per unit of Rings is

a.$45.51

b.$24.39

c.$2.61

d.$39.15

Answer 1

28.Ans:

Calculat amount of inventory under variable costing :

Variable cost of production = (183900+233800+254500)/19600 = 34.29 per unit

Ending inventory = 1900*34.29= 65151

so answer is b)65151

27.Ans:
Variable cost = Higher cost - lower cost / ( hours at higher cost - hours at lower cost )

= (3620 - 2646 ) / (17,543 - 10,410)

= 974 / 7133

= 0.141634

= 0.1365

Option (d) $ 0.14

28.Ans:
Ans: b) $24.39 is Correct Answer

Explanation:

Total machine hour = (1180*3+2710*7) = 22510
Total labor hour = (1180*6+2710*9) = 31470

Fabrication overhead rate = 80400/22510= 3.57 per machine hour

Assembly overhead rate = 71900/31470 = 2.28 per labor hour

Total factory overhead allocated per unit of Rings = (6*2.28+3*3.57) = 24.39

Hope this helped ! Let me know in case of any queries.