[15] [16] Inzaghi Corporation uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. For the month of August, Inzaghi Corporation estimated total manufacturing overhead costs at 300,000 and total machine hours at 75,000 hours. Actual results for the period were manufacturing overhead costs of 290,000 and 75,000 machine hours. Inzaghi Corporation has: a) Applied more overhead to Work in Process than the actual amount of overhead cost for the year b) Applied less overhead to Work in Process than the actual amount of overhead cost for the year c) Applied an amount of overhead to Work in Process that was equal to the actual amount of overhead d) Found it necessary to recalculate the predetermined overhead rate 1 Mark Mihajlovi Ltd. produces three types of pasta, linguine, spaghetti and fusilli, from a single raw material input. Budgeted data for the next month are: [17] Linguine Units produced 1,500 Spaghetti 2,000 Fusilli 3,000 Per unit sales value at split-off 10 12 15 Added processing costs per unit 2 4 4 Per unit sales value if processed further 15 15 20 If the cost of the raw material input is 78,000, which of the pasta types should be processed beyond the split-off point? a) Linguine yes; Spaghetti - yes; Fusilli - no b) Linguine yes; Spaghetti - no; Fusilli - yes c) Linguine no; Spaghetti - yes; Fusilli - no d) Linguine no; Spaghetti - yes; Fusilli - yes 1 Mark Terim Plc. is planning to invest in a machine with a useful life of five years and no salvage value. The machine is expected to produce cash flow from operations of 20,000 in each of the five years. Terim Plc.'s required rate of return is 10%. The maximum price that the company would pay for the machine is: a) 32,220 b) 62,100 c) 75,820 d) 122,100 3 Marks