1.Gerstein Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.70 per direct labor-hour, and 50,000 direct labor-hours. The company recently completed Job M800 which required 150 direct labor-hours.

The predetermined overhead rate is closest to:

$1.80 per direct labor-hour

$5.50 per direct labor-hour

$9.20 per direct labor-hour

$3.70 per direct labor-hour

2. Schwiesow Corporation has provided the following information:

	Cost per Unit		Cost per Period
Direct materials	$	7.05
Direct labor	$	3.50
Variable manufacturing overhead	$	1.65
Fixed manufacturing overhead			$	11,000
Sales commissions	$	1.00
Variable administrative expense	$	0.40
Fixed selling and administrative expense			$	5,500

The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to:

Multiple Choice

$14.40

$15.10

$16.90

$12.20