18. The most appropriate basis for allocating the factory building rent to specific departments would be the:

		Number of machines in each department.
		Number of employees in each department.
		Square footage of each department.
		Amount of time the plant manager spends in the department.

20. Which of the following is most likely to be considered a service department in a manufacturing plant?

		Assembly
		Maintenance
		Finishing
		Fabrication

25. A predetermined factory overhead rate is computed by dividing

		Actual overhead cost by actual production.
		Actual overhead cost by budgeted production.
		Budgeted overhead by actual production.
		Budgeted overhead by budgeted production.

22. Costs that remain the same, in total, when production levels change are:

		fixed costs.
		semivariable costs.
		direct labor costs.
		factory burden costs.

26. Lynch Audio produces stereo components for a major automotive stereo manufacturer. It currently uses the machine hour method of applying factory overhead to production. Information for the previous year follows:

	Budgeted amounts	Actual amounts
Factory overhead	$3,000,000	$3,050,000
Direct labor hours @ $10 per hour	$250,000	$248,000
# of machine hours	750,000	735,000

During the year, Lynch produced a new product, Super Tweeters, which involved $27,000 of material, 3,100 direct labor hours and 4,500 machine hours. a. Compute the predetermined factory overhead rate based on machine hours. b. Compute the amount of under- or overapplied factory overhead.

27. Variable overhead costs include all of the following except:

		Electricity to power machinery.
		Factory supplies.
		Rental of factory building.
		Small tools.