Answer the following questions. Show calculation steps. Use T charts or excel when necessary.
Which of the following would most likely NOT be included in manufacturing overhead in a furniture factory?
Question 1 options:
The cost of the glue in a chair
The amount paid to the individual who stains the chair
The workman’s compensation insurance of the supervisor who oversees production
The factory utilities of the department in which production take places
Question 2 (20 points)
Manufacturing Overhead includes
Question 2 options:
All direct material, direct labor, and administrative costs
all manufacturing costs except direct labor
all manufacturing costs except direct labor and direct materials
all selling and administrative costs
Question 3 (20 points)
Johansen Corporation uses a predetermined overhead rate based on direct labor -hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year:
Direct Materials – 6000
Direct Labor – 20000
Rent on Factory Building – 15000
Sales Salaries – 25000
Depreciation on Factory Equipment – 8000
Indirect labor – 12000
Production Supervisor’s salary – 15000
Jameson estimates that 20,000 direct labor hours will be worked during the year. The predetermined overhead rate per hour will be:
Question 3 options:
2.50
2.79
3.00
4.00
Question 4 (20 points)
Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor – hours during the period. The predetermined overhead rate is closest to:
Question 4 options:
10.37
12.10
11.10
11.30
Question 5 (20 points)
Dearden Corporation uses a job order costing system with a single plantwide predetermined overhead rate based on machine hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $144,000, Variable Manufacturing overhead of $2.00 per machine hour, 60,000 machine hours. The predetermined overhead rate is closest to:
Question 5 options:
2.40
6.40
4.40
2.00
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