1. Element Company has the following estimated costs for next year:

Accounts	Estimates	Cost Type?
Sales commissions	$75,000	Non-Manuf.
Direct labor	55,000	Direct
Salary of production supervisor	35,000	In-direct
Rent on factory equipment	16,000	In-direct
Direct materials	15,000	Direct
Advertising expense	11,000	Non-Manuf.
Indirect materials	5,000	In-Direct
Cost types: Direct, Indirect, Non-Manufacturing

The company estimates that 8,000 direct labor hours and 53,000 machine hours will be worked during the year.

If overhead is applied on the basis of direct labor hours, what will be the POHR per direct labor hour?

Tip! Not all the data will be inserted in calculation. Please figure out which data should be used to total manufacturing costs. Once you find this, then, follow the logic! Divited to.....?

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2. Sagon Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $76,000 and the total of the credits to the account was $66,000. Which of the following statements is true?

A) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000.

B) Actual manufacturing overhead incurred during the month was $66,000.

C) Manufacturing overhead applied to Work in Process for the month was $76,000.

D) Manufacturing overhead for the month was underapplied by $10,000.

Tip! Follow the logic!

Show your calculation here!

And mark your choice!

3. Philadelphia Company manufactures pipes and applies manufacturing overhead costs to production at a

budgeted indirect-cost rate of $15 per direct labor-hour. The following data are obtained from the

accounting records for June 2019:

Direct materials $140,000

Direct labor (3,500 hours @ $11/hour) $ 38,500

Indirect labor $ 10,000

Plant facility rent $ 30,000

Depreciation on plant machinery and equipment $ 15,000

Sales commissions as direct cost $ 20,000

Direct administrative expenses $ 25,000

Based on the data above, can you please find the actual amount of manufacturing overhead costs incurred in June 2019.

Tip! Not all data will be used in calculation! Carefully select the data that should be used to find out the actual amount of manufacturing costs.

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4. Western Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on machine hours in the Machining Department; and direct labor hour cost in the Assembly Department. At the beginning of the year, the company made the following estimates about the costs.

	Machining	Assembly
Direct labor hours	48,000	36,000
Direct labor cost	$60,000	$45,000
Machine hours	15,000	3,000
Manufacturing overhead	$75,000	$90,000

What predetermined overhead rates would be used in Machining and Assembly Departments, respectively?

Overhead rate in Assembly Dept: _______________%

Overhead rate in Assembly Dept: _______________%

Calculation area: