42. Collins Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 2017 is as follows: Estimated Actual $166,500 $165,000 60,000 Direct labour hours 50,000 The estimated overhead allocation rate for 2017 was: a) $2.75 b) $3.30 c) $3.33 d) $2.76 Answer: C Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 43. Collins Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 2017 is as follows: Estimated Actual $166,500 $165,000 60,000 Direct labour hours 50,000 The overhead allocated to work in process during 2017 before the year-end adjustment was: a) $199,800 b) $165,000 c) $166,500 d) $198,000 Answer: a Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 44. Collins Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 2017 is as follows: Estimated Actual $166,500 $165,000 60,000 Direct labour hours 50,000 The amount of over- or underapplied overhead for 2017 was: 44. Collins Company uses a job costing system and allocates overhead using an estimated overhead allocation rate based on direct labour hours. Information for 2017 is as follows: Actual $166,500 $165,000 60,000 Direct labour hours 50,000 The amount of over- or underapplied overhead for 2017 was: a) $1,500 underapplied b) $3,000 underapplied c) $1,500 overapplied d) $34,800 overapplied Answer: d Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 45. Following are the budgeted plant producing custom products: Materials (70% direct and 30% indirect) Labour (60% direct and 40% indirect) costs for a manufacturing $15,000 12,000 Amortization Utilities 5,000 10.000 4.860 Total $46.860 The company uses a normal costing system and overhead is allocated on the basis of direct labour cost. If actual direct labour cost was $7,500, the overhead allocated was: a) $29,160 b) $20,688 c) $30,375 d) $48,813 Answer: C Difficulty: Medium Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 46. Allen, Inc. has budgeted $120,000 in variable overhead and $72,000 in fixed overhead for the current month. 8,000 custom units were expected to be produced using 60,000 machine hours. During the month, Allen actually used 68,096 machine hours and produced 8,960 units. Actual overhead costs were: $132,000 variable and $73,600 fixed