Question

Job #335 requires work in the following departments:

Machining:

4 hours (all automated)

Sanding:  1 hour (all direct labor)

Painting:  2 hours (including dry time of 1.5 hours)

The company uses departmental overhead rates. Overhead is allocated at the rate of $6/direct labor hour in Sanding, and $15/machine hour in Machining. Painting overhead is allocated on the basis of total time in the department and is allocated at a rate of $3/hour.

How much overhead is allocated to the job?

	A.	None of the above
	B.	$67.50
	C.	$45
	D.	$78
	E.	$72

Cost of Goods Sold can be calculated in the following manner:

	A.	Beginning Work in Process + Cost of Goods Manufactured Ending Work in Process
	B.	Ending Finished Goods Beginning Finished Goods Manufacturing Overhead
	C.	Beginning Finished Goods + Cost of Goods Manufactured Ending Finished Goods
	D.	Ending Materials Inventory + Ending Work in Process + Ending Finished Goods

Managerial Accounting provides information which is primarily useful for:

	A.	Helping banks know whether to loan money to a company
	B.	Setting a company s stock price on the stock exchanges
	C.	Helping managers plan, manage, and make strategic decisions regarding the growth and profitability of the company.
	D.	Determining how much a company owes to the IRS in taxes

Answer 1

Q1.
Answer is E. $ 72.
Explanation:
Sanding oH (1 hr @ 6)	6
Machining (4 hrs @ 15)	60
Painting (2 hrs @ 3)		6
Total Overheads		72
Q2.
Answer is C. Beginning Finished goods + Cost of goods manufactured- Ending Finished goods
Q3.
Answer is C. Helping managers plan, manage, and make strategic decisions regardig the growth and profitability