Question
Test Company produces a product that passes through two departments: Department 1 and Department 2. Test Company determines product cost using a normal cost system.
-
Test Company produces a product that passes through two departments: Department 1 and Department 2. Test Company determines product cost using a normal cost system. The company applies overhead using a plant-wide rate based on machine hours. The company prepared the following estimates at the beginning of the year.
Department 1
Department 2
Total
Prime cost
$375,000
$700,000
$1,075,000
Overhead cost
$420,000
$240,000
$660,000
Direct labor hours
16,000
50,000
66,000
Machine hours
100,000
20,000
120,000
During the year, Test Company reported the following actual results.
Department 1
Department 2
Total
Prime cost
$475,000
$850,000
$1,325,000
Overhead cost
$450,000
$300,000
$750,000
Direct labor hours
20,000
60,000
80,000
Machine hours
125,000
25,000
150,000
Calculate the predetermined overhead rate Test Company uses to apply overhead.
$10.00 per direct labor hour
$5.00 per machine hour
$5.50 per machine hour
$16.20 per machine hour
Test Company produces a product that passes through two departments: Department 1 and Department 2. Test Company determines product cost using a normal cost system. The company applies overhead using a plant-wide rate based on machine hours. The company prepared the following estimates at the beginning of the year.
|
| Department 1 | Department 2 | Total |
| Prime cost | $375,000 | $700,000 | $1,075,000 |
| Overhead cost | $420,000 | $240,000 | $660,000 |
| Direct labor hours | 16,000 | 50,000 | 66,000 |
| Machine hours | 100,000 | 20,000 | 120,000 |
During the year, Test Company reported the following actual results.
|
| Department 1 | Department 2 | Total |
| Prime cost | $475,000 | $850,000 | $1,325,000 |
| Overhead cost | $450,000 | $300,000 | $750,000 |
| Direct labor hours | 20,000 | 60,000 | 80,000 |
| Machine hours | 125,000 | 25,000 | 150,000 |
Calculate the predetermined overhead rate Test Company uses to apply overhead.
| $10.00 per direct labor hour | ||
| $5.00 per machine hour | ||
| $5.50 per machine hour | ||
| $16.20 per machine hour |
5 points
QUESTION 2
-
THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 4.
Test Company produces a product that passes through two departments: Department 1 and Department 2. Test Company determines product cost using a normal cost system. The company applies overhead using a plant-wide rate based on machine hours. The company prepared the following estimates at the beginning of the year.
Department 1
Department 2
Total
Prime cost
$375,000
$700,000
$1,075,000
Overhead cost
$420,000
$240,000
$660,000
Direct labor hours
16,000
50,000
66,000
Machine hours
100,000
20,000
120,000
During the year, Test Company reported the following actual results.
Department 1
Department 2
Total
Prime cost
$475,000
$850,000
$1,325,000
Overhead cost
$450,000
$300,000
$750,000
Direct labor hours
20,000
60,000
80,000
Machine hours
125,000
25,000
150,000
Calculate the overhead applied to production for the year.
$825,000
$660,000
$800,000
$600,000
5 points
QUESTION 3
-
THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 4.
Test Company produces a product that passes through two departments: Department 1 and Department 2. Test Company determines product cost using a normal cost system. The company applies overhead using a plant-wide rate based on machine hours. The company prepared the following estimates at the beginning of the year.
Department 1
Department 2
Total
Prime cost
$375,000
$700,000
$1,075,000
Overhead cost
$420,000
$240,000
$660,000
Direct labor hours
16,000
50,000
66,000
Machine hours
100,000
20,000
120,000
During the year, Test Company reported the following actual results.
Department 1
Department 2
Total
Prime cost
$475,000
$850,000
$1,325,000
Overhead cost
$450,000
$300,000
$750,000
Direct labor hours
20,000
60,000
80,000
Machine hours
125,000
25,000
150,000
Calculate the overhead variance for the year.
$75,000 underapplied
$75,000 overapplied
$90,000 overapplied
$165,000 underapplied
5 points
QUESTION 4
-
THE FOLLOWING INFORMATION IS USED FOR QUESTIONS 1 4.
Test Company produces a product that passes through two departments: Department 1 and Department 2. Test Company determines product cost using a normal cost system. The company applies overhead using a plant-wide rate based on machine hours. The company prepared the following estimates at the beginning of the year.
Department 1
Department 2
Total
Prime cost
$375,000
$700,000
$1,075,000
Overhead cost
$420,000
$240,000
$660,000
Direct labor hours
16,000
50,000
66,000
Machine hours
100,000
20,000
120,000
During the year, Test Company reported the following actual results.
Department 1
Department 2
Total
Prime cost
$475,000
$850,000
$1,325,000
Overhead cost
$450,000
$300,000
$750,000
Direct labor hours
20,000
60,000
80,000
Machine hours
125,000
25,000
150,000
Calculate the total normal product cost for the year.
-
$2,075,000
$1,900,000
$1,735,000
$2,150,000
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Security And Auditing Of Smart Devices
Authors: Sajay Rai, Philip Chukwuma, Richard Cozart
1st Edition
0367567997, 978-0367567996
