Question

The following information is available pertaining to the Production Division of Clarkson Enterprises:

Assembly Dept.       Finishing Dept.        Total

Overhead costs                 $10,000        $30,000               $40,000

Direct labor hours 8,000           2,000                    10,000

Machine hours                 3,000           5,000                      8,000

Production information pertaining to Job 4X5:

Assembly Dept.       Finishing Dept.        Total

Prime costs           $2,380                    $-0-                        $2,380

Direct labor hours    280                         -0-                          280

Machine hours        -0-                           -0-                           -0-

Units produced       500                         -0-                           500

1. Refer to Figure 5-7. What is the plantwide overhead rate based on direct labor hours?

a. $1.00

b. $1.50

c. $3.00

d. $4.00

2. Refer to Figure 5-7. Using the plantwide overhead rate based on direct labor hours what is the cost of Job 4X5?

a. $1,250

b. $2,000

c. $8,750

d. $3,500

3. Refer to Figure 5-7. What is the overhead rate for the Finishing Department based on machine hours?

a. $6.00

b. $4.00

c. $2.25

d. $1.50

4. Refer to Figure 5-7. What are the total overhead costs assigned to Job 4X5, assuming the Assembly and Finishing Departments use direct labor hours and machine hours for their bases, respectively?

a. $62.50

b. $250.00

c. $350.00

d. $2,380.00

Figure 5-4

Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2014:

Materials placed into production           $170,000

Indirect labor                                                              40,000

Direct labor (10,000 hours)                               160,000

Depreciation of factory building              60,000

Other factory overhead                                    100,000

Increase in work-in-process inventory     20,000

Factory overhead rate is $20 per direct labor hour.

5. Refer to Figure 5-4. What is the total amount credited to Materials Inventory for Lanyard in 2014?

a. $480,000

b. $170,000

c. $140,000

d. $110,000

6. Refer to Figure 5-4. What is the total amount debited to Finished Goods Inventory in 2011?

a. $490,000

b. $510,000

c. $450,000

d. $550,000

Answer 1

Q1.
Answer is d. $4
Explanation:
Estimated overheads			40000
Divide: Labour hours			10000
OH rate per DLH			4
Q2.
Answer is d. $ 3500
Explanation:
Cost of Job 4X5
Prime Cost			2380
Oh (280 hrs @4)			1120
Total cost			3500
Q3.
Answer is a. $ 6.00
Explanation:
Estimated OH of finished deptt			30000
Divide: machine hours			5000
OH rate per MH			6
Q4.
Answer is c. $ 350
Explanation:
Assembly Oh (280*1.25 per DLH)			350
Finishing			0
Total OH cost of Job 4X5			350