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Multiple Choice 1. Aztec Builders allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year: Direct materials used Direct labour costs Salary of factory supervisor Advertising expense Heating and lighting costs for factory Depreciation on factory equipment Sales commissions $25,000 $62,000 $41,000 $33,000 $21,000 $9,000 $8,000 The firm estimates that 1,800 direct labour hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined indirect allocation rate per machine hour is closest to a. $56. b. $36. c. $100. d. $15. e. $40. 2. Blockbuster Entertainment manufactures digital video equipment. For each unit $1,475 of direct material is used and there is $1,500 of direct manufacturing labour at $30 per hour. Manufacturing overhead is applied at $35 per direct manufacturing labour hour. Calculate the cost of each unit. a. $2,975 b. $4,025 c. $1,750 d. $3,150 e. $4,725 3. In an activity-cost pool a. a measure of the activity performed serves as the cost allocation base. b. the costs have a cause-and-effect relationship with the cost-allocation base for that activity. c. the cost pools are homogeneous over time. d. costs in a cost pool can always be traced directly to products. e. each pool pertains to a narrow and focused set of costs. Answer the following question(s) using the information below. Peter's Printers has contracts to complete weekly supplements required by forty-six customers. For the year 2019, manufacturing overhead cost estimates total $420,000 for an annual production capacity of 12 million pages. For 2019, Peter's Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inonantinne nra tho nrimoni manufnsturinn vorhand Reply inspections are the primary manufacturing overhead cost drivers. The following information was gathered during the analysis: Cost pool Design changes Manufacturing overhead costs Activity level 300 design $60,000 changes 320,000 5,000 setups 8,000 40,000 inspections Setups Inspections Total manufacturing Joverhead costs $420,000 4. What is the cost driver rate if manufacturing overhead costs are considered one large cost pool and are assigned based on 12 million pages of production capacity? a. $0.05 per page b. $0.035 per page c. $0.35 per page d. $0.025 per page e. $0.045 per page 5. Using pages printed as the only overhead cost driver, what is the manufacturing overhead cost estimate for World Makers during 2019? a. $2,500 b. $21,000 c. $1,500 d. $2,700 e. $2,100 6. Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools? a. $200 per change, $64 per setup, $5 per inspection b. $180 per change, $76 per setup, $4 per inspection c. $150 per change, $64 per setup, $4 per inspection d. $180 per change, $76 per setup, $5 per inspection e. $200 per change, $5 per setup, $64 per inspection