13 Nabokov Company applies Manufacturing Overhead (MOH) on the basis of Direct Labor Hours (DLHs). The company uses traditional POHR method. For the month of January: If MOH was overapplied by $7,000 in January, actual DLHs at the beginning of the period were closest to: The Orwell Corporation sells a component for an industrial machine. nonth Orwell found that the current net operating income is equal to 15% of current sales. What is Orwell's current Margin of Safety (in dollars)? 1 Doyle Sports makes and sells three products high-quality sports equipment: Standard, DeLuxe, and Pro. Selected GAAP income statement information is given below: How many units of Standard should Doyle make to break even? (Choose the closest number.) 10 Which of the following statements is true? A. The entire difference between the actual manufacturing overhead cost for a period and the applied manufacturing overhead cost is typically closed to the Work In Process inventory account. B. A credit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead was overapplied. C. When direct materials are purchased, they are first recorded on the appropriate job cost sheets and posted as an increase to the Work in Process Inventory account. D. In a normal costing system, the schedule of cost of goods manufactured contains actual direct materials, actual direct labor, and actual manufacturing overhead as well as the beginning and ending balances in the Work in Process Inventory account. E. None of the statements are true. 9 Patterson, Inc. uses job-order costing with manufacturing overhead (MOH) applied on the basis of machine hours (MHs). In the past, the company's pre-determined overhead rate (POHR) has fluctuated from period to period due primarily to differences in expected usage of their machine. For the coming month, the controller would like to investigate using capacity in determining the application of overhead to jobs. For the period, the machine can operate at a capacity of 320MHs, however, based on expected production, it is estimated that only 290MHs will be required. MOH is relatively fixed for the company and is estimated to be $11,600 at both of these levels of MHs. At the end of the period, the controller found that production used 292MHs and actual MOH totaled $11,745. How much less MOH would be applied during the month using capacity MHs rather than the traditional method? A. \$ 1,241.00 less applied to MOH using capacity. B. \$ 1,087.50 less applied to MOH using capacity. C. \$ 1,095.00 less applied to MOH using capacity. D. \$ 1,167.50 less applied to MOH using capacity. E. None of the above Tolkien Company started its operation on November 1 with no beginning inventories. It started two jobs during July-Job P and Job Q. Job P was completed and sold by the end of November. Job Q was completed but was not sold by the end of November. The company uses a plant-wide predetermined overhead rate based on direct labor-hours (DLHs) and applies MOH costs based on the actual DLHs. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of November): The ending inventory balance of Work-in-process: $0 The ending inventory balance Finished Goods Inventory: $24,380 12 The information for Twain Corporation is given below. Degree of operating leverage: Break-even revenue: 2 320,000 60% of Sales Variable Expense: What is the Twain's actual net operating income? A. \$ $160,000 B. $128,000 C. $192,000 D. $96,000 E. None of the above