Note: Please put your name & ID# on the exam & answer sheet. Provide all your answers on the answer sheet and return it along with the exam after comp 11. Destin Products uses job-costing system with two direct cost pools and one manufacturing overhead cost pool. Destin allocates manufacturing overhead using direct manufacturing labor costs: Actual Results for 2011 Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Budget for 2011 $2,000,000 1,500,000 2,700,000 $1,900,000 1,450,000 2,755,000 What is the budgeted manufacturing overhead rate for 2011? A) 1.35 B) 1.9 C) 1.8 D) 1.45 12. Referring to the data in Destin Products above, what is the amount of over-allocation or under- allocation of manufacturing overhead cost at the end of 2011? A) Under-allocation: $145,000 B) Over-allocation: $55,000 C) Under-allocation: $90,000 D) Over-allocation: $145,000 13. Why should managers worry about product over-costing or under-costing? A) Over-costing may result in competitors entering a market and taking market share for products B) Under-costing may result in companies selling products on which they are in fact losing money, C) Under-costing may result in customer dissatisfaction due to erroneously high sales prices set by D) Both A. and B. that a company erroneously believes are low-margin or even unprofitable when they erroneously believe them to be profitable management 14. Why would companies prefer to use normal costing over actual costing? A) Normal costing is easier to operate as it requires less calculation during budgeting process compared to actual costing B) Normal costing uses actual cost rates and actual quantities to calculate job costs C) Normal costing enables companies to report a job cost as soon as the job is completed, assuming that both direct materials and direct labor costs are known at the time of use D) All of the above Note: Please put your name & ID# on the exam & answer sheet. Provide all your answers on the answer sheet and return it along with the exam after comp 11. Destin Products uses job-costing system with two direct cost pools and one manufacturing overhead cost pool. Destin allocates manufacturing overhead using direct manufacturing labor costs: Actual Results for 2011 Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Budget for 2011 $2,000,000 1,500,000 2,700,000 $1,900,000 1,450,000 2,755,000 What is the budgeted manufacturing overhead rate for 2011? A) 1.35 B) 1.9 C) 1.8 D) 1.45 12. Referring to the data in Destin Products above, what is the amount of over-allocation or under- allocation of manufacturing overhead cost at the end of 2011? A) Under-allocation: $145,000 B) Over-allocation: $55,000 C) Under-allocation: $90,000 D) Over-allocation: $145,000 13. Why should managers worry about product over-costing or under-costing? A) Over-costing may result in competitors entering a market and taking market share for products B) Under-costing may result in companies selling products on which they are in fact losing money, C) Under-costing may result in customer dissatisfaction due to erroneously high sales prices set by D) Both A. and B. that a company erroneously believes are low-margin or even unprofitable when they erroneously believe them to be profitable management 14. Why would companies prefer to use normal costing over actual costing? A) Normal costing is easier to operate as it requires less calculation during budgeting process compared to actual costing B) Normal costing uses actual cost rates and actual quantities to calculate job costs C) Normal costing enables companies to report a job cost as soon as the job is completed, assuming that both direct materials and direct labor costs are known at the time of use D) All of the above