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6. Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,800 hours and

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6. Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,800 hours and the total estimated manufacturing overhead was $497,040. At the end of the year, actual direct labor-hours for the year were 21,500 hours and the actual manufacturing overhead for the year was $492,040. Overhead at the end of the year was: A. $6,840 Overapplied B. $6,840 Underapplied C. $1,840 Overapplied D. $ 1,840 Underapplied 7. Rondo Children's Clinic allocates service department costs to operating departments using the step-down method. The clinic has two service departments, Administration and Information Technology (IT), and two operating departments, Prenatal and Pediatric. Data concerning those departments follow: Operating Service Department Department Administration IT Prenatal Pediatric Departmental costs $54,736 $3 7,449 $3 83,270 $259,590 Employees 15 21 1 18 172 PCs 15 21 102 109 Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatric Department cost aer allocations is closest to: A. $280,845 B. $304,995 C. $311,117 D. $311,400 8. An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles (GAAP) because: A. under activity-based costing some manufacturing costs will not be assigned to products. B. under activity-based costing the sum of all product costs does not equal the total costs of the company. C. activity-based costing has not been approved by the United Nation's International Accounting Board. D. activity-based costing results in less accurate costs than more traditional costing methods based on direct labor-hours or machine-hours. 9. A partial listing of costs incurred at Archut Corporation during September appears below: Direct materials $ 1 13,000 Utilities, factory $ 5,000 Administrative salaries $ 81,000 Indirect labor $ 25,000 Sales commissions $ 48,000 Depreciation of production equipment $ 20,000 Depreciation of administrative equipment $ 30,000 Direct labor $ 129,000 Advertising $ 1 35,000 The total of the Conversion Costs as listed above for September is: A. $50,000 B. $129,000 C. $159,000 D. $ 154,000 10. Cranston Corporation makes four products in a single facility. Data concerning these products appear below: Products A B C D Selling priceperunit $ 42.30 $ 50.00 $ 3?.60 $ 33.50 Variable manufacturing costper unit $ 20.80 $ 30.70 $ 21.00 $ 19.90 Variable selling costper unit $ 2.70 $ 2.10 $ 1.00 $ 2.40 Milling machine minutes per unit 3.30 4.10 2.60 1.30 Monthly demand in units 1,000 4,000 3,000 3,000 The milling machines are potentially the constraint in the production facility. A total of 28,200 machine minutes are available per month on these machines. Which product makes the MOST protable use of the milling machine minutes? A. Product A B. Product B C. Product C D. Product D 11. A business manufactures a single product that it sells for $10 per unit. The materials cost for each unit of product sold is $3. Total operating expenses (i.e., total factory cost) are $50,000 each month. Labor hours are limited to 20,000 hours each month. Each unit of product takes 2 hours to assemble. What is the throughput accounting ratio (TPAR) for this business? A. 2.00 B. 1.40 C. 0.71 D. 0.60

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