30. Kater Company manufactures shelving units. The company receives pre-cut wood, drills holes in the wood so that movable shelves may be installed, then assembles and paint the units. Classify each of the following items of factory overhead as either fixed or variable cost. a. Supervisor of the Drilling Department b. Oil used to lubricate drill press machines c. Propane for forklift trucks used to move the material from the Drilling Department to the Assembly Department d. Natural gas used to heat the plant e. Security guard f. Insurance on factory building g. Electricity to power drill press machines h. Rent of factory building

16. At the end of the year, Jenkins Corporation had $120,000 in the Factory Overhead account and $100,000 in the Applied Factory Overhead account. Mark Gibbs, the controller, has decided that the overhead difference is too large to close to only the Cost of Goods Sold account. He decides it is best to charge the overhead difference to the Work in Process, Finished Goods and Cost of Goods Sold accounts. The balance in these three accounts is:

Work in Process $30,000

Finished Goods $60,000

Cost of Goods Sold $210,000

How much of the overhead difference will be charged to the Cost of Goods Sold account?

$2,000.

$14,000.

$6,000.

20,000.

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.