1. Assume a company had no jobs in progress at the beginning of July and no beginning inventories. It started and completed only two jobs during JulyJob Y and Job Z. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information from the month of July is available for the company as a whole and for Jobs Y and Z:

Estimated total fixed manufacturing overhead	$	13,000
Estimated variable manufacturing overhead per direct labor-hour	$	1.00
Estimated total direct labor hours to be worked		2,000
Total actual manufacturing overhead costs incurred	$	12,800

	Job Y			Job Z
Direct materials	$	13,000		$	8,000
Direct labor cost	$	21,000		$	7,500
Actual direct labor hours worked		1,400			500

Assuming Job Z contains 200 units and that the company applies a markup of 60% when establishing its selling prices, the price per unit that it would choose for Job Z is closest to:

Multiple Choice

• $134

• $154

• $164

2. Assume a company started and completed numerous jobs during Julyone of which was Job Z. The company uses two departmental predetermined overhead rates. The rate in the Machining Department is based on machine-hours and the rate in the Assembly Department is based on direct labor-hours. The following additional information from the month of July is available for the company as a whole and for Jobs Z:

	Machining				Assembly
Estimated total fixed manufacturing overhead	$	48,000			$	30,000
Estimated variable manufacturing overhead per machine-hour	$	1.50
Estimated variable manufacturing overhead per direct labor-hour					$	2.00
Estimated total machine-hours to be used		12,000
Estimated total direct labor hours to be worked						10,000

Job Z	Machining					Assembly
Direct materials		$	650				$	700
Direct labor		$	200				$	900
Machine-hours			40
Direct labor-hours								60

What is the total job cost for Job Z?

Multiple Choice

• $2,890

• $2,910

• $2,970

3. Assume a company started and completed numerous jobs during Julyone of which was Job Z. The company uses two departmental predetermined overhead rates. The rate in the Machining Department is based on machine-hours and the rate in the Assembly Department is based on direct labor-hours. The following additional information from the month of July is available for the company as a whole and for Jobs Z:

	Machining				Assembly
Estimated total fixed manufacturing overhead	$	48,000			$	30,000
Estimated variable manufacturing overhead per machine-hour	$	1.50
Estimated variable manufacturing overhead per direct labor-hour					$	2.00
Estimated total machine-hours to be used		12,000
Estimated total direct labor hours to be worked						10,000

Job Z	Machining					Assembly
Direct materials		$	650				$	700
Direct labor		$	200				$	900
Machine-hours			40
Direct labor-hours								60

If Job Z contains 50 units, the unit product cost for Job Z is closest to:

Multiple Choice

• $58.20

• $59.10

• $59.40

4. A company makes two productsProduct A and B. Data regarding the two products follow:

	Direct Labor-Hours per Unit	Annual Production
Product A	0.75	20,000 units
Product B	0.50	50,000 units

Additional information is as follows:

1. Product A requires $15 in direct materials per unit, and Product B requires $8.
2. The direct labor wage rate is $18 per hour.
3. The companys activity-based absorption costing system has the following activity cost pools:

	Estimated					Expected Activity
Activity Cost Pool (and Activity Measures)	Overhead Cost					Product A			Product B		Total
Machine setups (number of setups)		$	100,000				100		300		400
Special processing (machine-hours)		$	200,000				2,000		6,000		8,000
General factory (Direct labor-hours)		$	150,000				15,000		25,000		40,000

Using activity-based absorption costing, what is the total manufacturing cost (including direct materials, direct labor, and manufacturing overhead) for Product B?

Multiple Choice

• $1,168,750

• $1,085,250

• $1,220,500

5. Which of the following statements is true when a company uses a predetermined overhead rate based on capacity?

Multiple Choice

• The amount of overhead assigned to cost objects, such as products and customers, will include some unused capacity costs.

• The unused capacity cost will fluctuate from one period to the next due solely to the fact that the companys level of output increases or decreases from one period to the next.

• The amount of overhead assigned to cost objects, such as products and customers, will fluctuate from one period to the next due solely to the fact that the companys level of output increases or decreases from one period to the next.

6. Assume a company reported the following information for this year:

Budgeted (estimated) production		80,000		units
Budgeted sales		80,000		units
Production capacity		100,000		units
Selling price	$	50		per unit
Variable manufacturing cost	$	18		per unit
Estimated total manufacturing overhead cost (all fixed)	$	700,000
Selling and administrative expenses (all fixed)	$	250,000
Beginning inventories	$	0

Using a predetermined overhead rate based on capacity with units produced as the allocation base, the companys budgeted income statement would report unused capacity costs that are closest to:

Multiple Choice

• $175,000

• $165,000

• $140,000

6.

Assume a company reported the following information for this year:

Budgeted (estimated) production		80,000		units
Budgeted sales		80,000		units
Production capacity		100,000		units
Selling price	$	25		per unit
Variable manufacturing cost	$	12		per unit
Estimated total manufacturing overhead cost (all fixed)	$	700,000
Selling and administrative expenses (all fixed)	$	250,000
Beginning inventories	$	0

Using a predetermined overhead rate based on capacity with units produced as the allocation base, the companys budgeted income statement would report a gross margin that is closest to:

rev: 04_16_2020_QC_CS-208650, 06_15_2020_QC_CS-208650

Multiple Choice

• $1,300,000

• $480,000

• $90,000