1.The following information pertains to Famous Company:

	Support Departments		Producing Departments
	Personnel	Maintenance	Fabrication	Assembly
Budgeted overhead	$40,000	$72,000	$140,000	$160,000
Direct labor hours	2,000	2,500	8,000	10,000
Machine hours	-	-	12,000	8,000
Number of employees	4	5	15	25

Famous Company does not divide costs into fixed and variable components. Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours.

Predetermined overhead rates for fabrication and assembly are based on direct labor hours.

What is the amount of maintenance costs allocated to the Assembly Department using the direct method? (Round amounts to dollars.)

a.$28,800.

b.$14,400.

c.$38,160.

d.$48,000.

2.Ely Company has two support departments, Maintenance Department and Personnel Department, and two producing departments, X and Y. The Maintenance Department costs of $60,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $9,000 are allocated on the basis of number of employees. The direct costs of Departments X and Y are $18,000 and $30,000, respectively.

Data on standard service hours and number of employees are as follows:

	Maint.	Person.	Dept.	Dept.
	Dept.	Dept.	X	Y
Standard service hours used	100	50	300	150
Number of employees	5	10	45	45
Direct labor hours	50	50	250	250

Predetermined overhead rates for Departments X and Y, respectively, are based on direct labor hours.

What is the overhead rate for Department Y assuming the direct method is used?

a.$120.00

b.$218.00

c.$109.00

d.$250.00

3.Tec-Pro Company has two support departments (S1 and S2) and two producing departments (P1 and P2). Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet.

Data on direct department costs, number of employees, and space occupied are as follows:

	S1	S2	P1	P2
Direct dept. costs	$7,500	$11,000	$27,500	$30,000
Number of employees	10	5	20	25
Space occupied (sq. ft.)	1,000	500	1,500	2,500

When Tec-Pro uses the sequential method, the support department allocated first is the one with the highest percentage of interdepartmental service. The choice of the department allocated first is determined by the comparison of the following ratio for S1 and S2, respectively:

a.10/55; 500/4,500

b.5/60; 1,000/5,500

c.5/50; 1,000/5,000

d.10/50; 1,000/5,000

4.Roaming Vehicles Company manufactures buggies. Manufacturing a buggy takes 20 units of wood and 1 unit of steel. Scheduled production of buggies for the next two months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units in each of the next two months, and the steel inventory is expected to increase 5 units in each of the next two months.

What is the number of units of wood that need to be purchased by Roaming Vehicles Company during the first month?

a.500 units

b.1,000 units

c.9,500 units

d.10,000 units