Question
Question 1: Magma Inc. uses a job-order costing system with a single plant wide predetermined overhead rate based on direct labor hours. The company based
Question 1:
Magma Inc. uses a job-order costing system with a single plant wide predetermined overhead rate based on direct labor hours. The company based its predetermined overhead rate for the current year with the following data:
Total direct labor-hours 50,000
Total fixed manufacturing cost $100,000
Variable manufacturing overhead per direct labor-hour $4.00
Recently Job #6969 was completed the following characteristics:
# of units in the job 20
Total direct labor-hours 100
Direct Materials $755
Direct Labor Cost $4,000
The estimated total manufacturing overhead is closet to:
A) $216,000
B) $96,000
C) $96,003
D) $300,000
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Question 2
Lorax Mfg. Ltd uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor-hours in Dept. C and on machine-hours in Dept. D. At the beginning of the year, the Corporation made the following estimates:
| Dept. C | Dept. D |
| ||
Direct labor cost | $ | 60,000 | $ | 30,000 | |
Manufacturing overhead | $ | 90,000 | $ | 45,000 | |
Direct labor-hours |
| 6,000 |
| 9,000 | |
Machine-hours |
| 2,000 |
| 15,000 | |
What predetermined overhead rates would be used in Dept. C and Dept. D, respectively?
A) $23.33 and 250%
B) $23.33 and $5.00
C) $15.00 and 150%
D) $15.00 and $3.00
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started