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MC.18.45.ALGO Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are

MC.18.45.ALGO

Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below.

Product Number of Units Direct Labor Hours Per Unit Machine Hours Per Unit
Blinks 1,039 4 6
Dinks 2,177 5 8

All of the machine hours take place in the Fabrication department, which has an estimated overhead of $91,300. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $95,700.

Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks is

a.$49.72

b.$19.24

c.$382.82

d.$62.16

3. MC.18.51.ALGO

Blackwelder Factory produces two similar products: small table lamps and desk lamps. The total factory overhead budget is $520,000 with 507,000 estimated direct labor hours. It is further estimated that small table lamp production will require 264,000 direct labor hours, and desk lamp production will need 125,000 direct labor hours.

Using a single plantwide factory overhead rate with an allocation base of direct labor hours, the factory overhead that Blackwelder Factory will allocate to small table lamp production if actual direct labor hours for the period for small table lamp production is 193,000 would be

a.$711,295

b.$198,790

c.$413,004

d.$564,938

4. MC.18.56.ALGO

Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours.

Overhead Direct Labor Hours (dlh) Product
A B
Painting Dept. $250,600 8,500 dlh 15 dlh 2 dlh
Finishing Dept. 76,000 9,900 6 19
Totals $326,600 18,400 dlh 21 dlh 21 dlh

The factory overhead allocated per unit of Product B in the Painting Department if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is

a.$35.50 per unit

b.$15.35 per unit

c.$58.96 per unit

d.$29.48 per unit

5. MC.18.61.ALGO

Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $594,825, using 360,500 direct labor hours. The factory overhead budget for the Assembly Department is $492,100, using 66,500 direct labor hours.

If a desk lamp requires 5 hours of fabrication and 8 hours of assembly, the amount of factory overhead that Kaumajet Factory will allocate to each unit of desk lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours is

a.$212.47

b.$7.40

c.$16.34

d.$67.45

6. MC.18.64

Using multiple department factory overhead rates instead of a single plantwide factory overhead rate

a.results in distorted product costs

b.results in more accurate product costs

c.applies overhead costs to all departments equally

d.is simpler and less expensive to compute than a plantwide rate

7. MC.18.70

All of the following can be used as an allocation base for calculating factory overhead rates except

a.direct labor dollars

b.direct labor hours

c.total units produced

d.machine hours

8. MC.18.71.ALGO

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

Activity Cost Activity Base
Procurement $341,500 Number of purchase orders
Scheduling 248,400 Number of production orders
Materials handling 409,500 Number of moves
Product development 782,000 Number of engineering changes
Production 1,509,500 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 3,910 260 1,500 14 1,900 1,700
Tape drives 1,800 155 630 7 9,100 3,600
Wire drives 12,300 870 4,100 29 10,300 2,800

The activity rate for the procurement activity cost pool is

a.$265.76 per purchase order

b.$193.31 per purchase order

c.$18.96 per purchase order

d.$70.87 per purchase order

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