Question

QUESTION 22

Dukes Corporation used a predetermined overhead rate this year of $2 per direct labor-hour, based on an estimate of 20,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were:

Actual manufacturing overhead cost incurred	$	38,000
Actual direct labor-hours worked		18,500

The overapplied or underapplied manufacturing for the year was:

		$3,000 overapplied
		$1,000 overapplied
		$1,000 underapplied
		$3,000 underapplied

2.5 points   

QUESTION 23

Product Y sells for $15 per unit, and has variable expenses of $9 per unit. Fixed expenses total $300,000 per year. How many units of Product Y must be sold each year to yield an annual profit of $90,000?

		15,000 units
		43,333 units
		50,000 units
		65,000 units

Answer 1

22)APplied overhead =Actual hours worked* predetermined overhead rate

                = 18500*2

               = 37000

Underapplied / (overapplied) overhead =Actual -Applied

            = 38000 -37000

              =1000 underapplied

correct option is " C"

23)units to sell to achieve target profit = [Fixed cost+ target profit ]/[price- variable expense]

            =[300000+90000]/[15-9]

           = 390000/ 6

           = 65000 units

correct option is "D"