Question

1.

A company allocates overhead on the basis of direct labor dollars. Estimated direct labor is $100,000 and estimated overhead is $200,000. Actual overhead is $190000 and actual direct labor is $90,000. What is the amount of applied overhead?

		$200,000
		$170,000
		$180,000

2.

When revenues equal costs, it is called

		margin of safety
		contribution margin
		fixed cost ratio
		break-even point

3.

In variable costing income statements

		fixed overhead is part of product costs
		fixed costs are part of product costs
		fixed costs are deducted from the contribution margin
		fixed costs are ignored

4.

Use this information to do questions 42-48

Jones company makes two products A & B. Here is some financial information about those products.

                         A    B     Combined total cost of cost drivers

Direct labor    $45,000 $35,000

Direct materials              $40,000 $30,000

Cost drivers

               Set ups 6    4 $10,000

             Inspections    4    6 $5,000

                 Test Runs 12     8 $25,000

                 Units produced    1000 1000

If ABC computed overhead at the rate of 50 cents per labor dollar, what is the unit

cost for product A?

		$1075
		$107.50
		$98
		$23

Answer 1

The answer has been presented in the supporting sheet.