Question

4A. Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based...

4A.

Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:

Total machine-hours 80,000
Total fixed manufacturing overhead cost $ 312,000
Variable manufacturing overhead per machine-hour $ 2.10

Recently, Job T629 was completed with the following characteristics:

Number of units in the job 50
Total machine-hours 200

The predetermined overhead rate is closest to:

Multiple Choice

  • $8.10 per machine-hour
  • $2.10 per machine-hour
  • $3.90 per machine-hour
  • $6.00 per machine-hour

4B.

Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:

Total machine-hours 30,000
Total fixed manufacturing overhead cost $ 252,000
Variable manufacturing overhead per machine-hour $ 2.10

Recently, Job T687 was completed with the following characteristics:

Number of units in the job 10
Total machine-hours 30
Direct materials $ 675
Direct labor cost $ 1,050

The estimated total manufacturing overhead is closest to:

Multiple Choice

  • $315,000
  • $252,000
  • $252,002
  • $63,000

4C.

Boesenhofer, Inc., manufactures and sells two products: Product N6 and Product N7. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Estimated Expected Activity
Activity Cost Pools Activity Measures Overhead Cost Product N6 Product N7 Total
Labor-related DLHs $ 345,060 2,100 5,000 7,100
Machine setups setups 128,534 600 800 1,400
Order size MHs 107,598 4,100 3,800 7,900
$ 581,192



The activity rate for the Machine Setups activity cost pool is closest to:

rev: 03_25_2018_QC_CS-119201

Multiple Choice

  • $73.57 per setup
  • $91.81 per setup
  • $26.24 per setup
  • $28.32 per setup

Homework Answers

Answer #1

4A. The predetermined overhead rate is closest to:

$6.00 per machine-hour

Fixed manufacturing overhead cost per machine hour = $312,000 / 80,000 = $3.90

Variable manufacturing overhead cost per machine hour = $2.10

Total = $3.90 + $2.10 = $6.00

4B. The estimated total manufacturing overhead is closest to:

$315,000

Fixed manufacturing overhead cost = $252,000
Variable manufacturing overhead cost = 30,000 x $2.10 = $63,000

Total = $252,000 + $63,000 = $315,000

4C. The activity rate for the Machine Setups activity cost pool is closest to:

$91.81 per setup

Total estimated overhead cost of machine setups = $128,534

Total estimated activity = 1,400 setups

Activity rate for machine setups activity cost pool = $128,534 / 1,400 = $91.81 per setup.

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