Question

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

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.