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 S73,600 fixed. Assume Allen uses an actual costing system. The amount of over- or underapplied overhead for the current month is: a) $9,440 overapplied b) $12,307 overapplied c) SO d) $13,600 overapplied Answer: c Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 47. 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. Assume Allen uses a normal costing system. The variable overhead allocated would be: a) $136,192 b) $132,000 c) $134,400 d) $120,000 Answer: a Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 48. Kelita's Kar Company projects the following costs: Direct material Direct labour Indirect labour wages Sales commissions Production foremen salaries Production equipment leases Production amortization Property taxes-plant S300,000 500,000 50,000 30,000 75,000 125,000 60,000 25,000 48. Kelita's Kar Company projects the following costs: Direct material Direct labour Indirect labour wages Sales commissions Production foremen salaries Production equipment leases Production amortization $300,000 500,000 50,000 30,000 75,000 125,000 60,000 25,000 If overhead is allocated on the basis of direct labour hours and 25,000 direct labour hours are budgeted for next year, the estimated overhead allocation rate will be a) $13.40 per direct labour hours b) $14.60 per direct labour hours c) $12.40 per direct labour hours d) $33.40 per direct labour hours Answer: a Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 49. A firm had the following balances at the end of the period: Work in process Finished goods Cost of goods sold $400 1,000 400 It was determined that the overapplied overhead should be treated as immaterial. After any adjustments for overapplied overhead are made, the balance of work in process would be: a) $320 b) $400 c) $480 d) $534 Answer: b Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 50. Assume there is $2,000 of overapplied fixed overhead, which is to be prorated. Current balances of selected accounts are process $15.000