Question

1-

The fixed costs per unit are OMR 9.6 when a company produces 10,000 units of product. What are the fixed costs per unit when 8,000 units are produced?

Select one:

a.
11.2

b.

12

c.

9.6

d.
8

2-

The following data pertain to the current period:

Budgeted machine hours for the current period             80,000 hrs.

Budgeted manufacturing overhead                                  OMR 980,000

Actual machine hours                                                       90,000. Hrs.

Actual manufacturing overhead                           OMR 800,000.

On the basis of this information, the company's year-end overhead was:

Select one:

a.
Over-applied by 302,500.

b.
Over-applied by 80,000.

c.
Under-applied by 80,000.

d.
Under-applied by 302,500.

Answer 1

1	Total Fixed Costs incurred(10000*OMR 9.6)	OMR 96,000
	Fixed Cost per unit at 8000 units(OMR 96,000 / 8000)	OMR 12
	So Option C is answer
2	Budgeted Overhead Rate =Budgeted manufacturing overhead / Budgeted machine hours
	Budgeted Overhead Rate =OMR 980,000 / 80,000 hours =$12.25 per machine hours
	Manufacturing overhead applied =Budgeted Overhead Rate*Actual direct machine hours
	Manufacturing overhead applied =OMR12.25*90,000 hours =OMR 1,102,500
	Actual Manufacturing overhead =OMR 800,000
	Overapplied Manufacturing Overhead = Manufacturing overhead applied - Actual Manufacturing overhead
	Overapplied Manufacturing Overhead =OMR 1,102,500 - OMR 800,000 =OMR 302,500
	So Option A is answer