Cost Accounting Quiz: Predetermined Overhead Rate Por

A company is automating its factory. The new equipment will cause estimated annual fixed manufacturing overhead to increase from $300,000 to $500,000. Because fewer workers are needed, estimated annual direct labor hours are expected to decrease from 20,000 to 10,000. Variable overhead per direct labor hour is expected to remain the same at $5.00. The company uses direct labor hours as its allocation base. What will be the effect of these changes on the predetermined overhead rate?

For a particular job, Gemini Corp. incurred $4,000 in direct material costs and $6,000 in direct labor costs. The job required 300 machine hours to complete. The company's budget for the year included total manufacturing overhead of $500,000, total direct labor costs of $800,000, and total machine hours of 20,000. Gemini uses machine hours as its allocation base. What is the total manufacturing cost of this job?

A company is considering switching its overhead allocation base from 40,000 estimated direct labor hours to 25,000 estimated machine hours. Total estimated overhead is $200,000. A particular product, Job #88, requires 8 direct labor hours and 6 machine hours. What would be the difference in overhead allocated to Job #88 if the company switches from the direct labor hour base to the machine hour base?

A company budgeted $450,000 of manufacturing overhead and 30,000 direct labor hours. Actual results were $472,000 of manufacturing overhead and 32,000 direct labor hours. A specific job completed during the period required 50 direct labor hours. How much more or less overhead would be allocated to this job if an actual overhead rate had been used instead of a predetermined rate?

Orion Industries calculates its predetermined overhead rate on an annual basis. For the current year, estimated total manufacturing overhead is $1,200,000, and estimated total machine hours are 60,000. In March, the company incurred actual manufacturing overhead of $105,000 and worked 5,200 machine hours. How much manufacturing overhead was applied to production during the month of March?

Stellar Corp. uses a predetermined overhead rate of $18.50 per machine hour. The company's budget for the period was based on 10,000 machine hours. During the period, the company actually worked 11,000 machine hours and incurred actual manufacturing overhead costs of $205,000. What is the total manufacturing overhead applied to Work in Process during the period?

Apex Manufacturing budgets the following costs for the upcoming year: Direct materials, $250,000; Direct labor, $400,000; Factory depreciation, $120,000; Factory utilities, $80,000; Indirect labor, $50,000; Sales commissions, $60,000; and Administrative salaries, $90,000. The company plans to operate at a level of 50,000 direct labor hours. What is the company's predetermined overhead rate per direct labor hour?

Over the last two years, Caspian Corp. has observed the following manufacturing overhead costs at two activity levels. In Year 1, at 10,000 machine hours, costs were $180,000. In Year 2, at 15,000 machine hours, costs were $230,000. The company plans to operate at 12,000 machine hours in the upcoming year and will use the high-low method to create a cost formula. What will be the predetermined overhead rate for the upcoming year?

The total manufacturing cost for Job #123 was $8,400. Direct materials charged to the job were $2,000. The company applies manufacturing overhead at a rate of 150% of direct labor cost. What was the amount of manufacturing overhead applied to Job #123?

Rocky Mountain Products uses a predetermined overhead rate based on direct labor dollars. The rate was set at 180% of direct labor cost based on estimated overhead of $648,000. During the current period, Job Alpha incurred direct labor costs of $5,400, Job Beta incurred $8,100, and Job Charlie incurred $3,600. If Jobs Alpha and Charlie were completed but only Job Alpha was delivered to the customer, what amount of applied overhead remains in Finished Goods inventory?

At the end of the fiscal year, Galileo Corp. reported actual manufacturing overhead of $410,000 and actual direct labor hours of 20,000. The company's records show that manufacturing overhead was over-applied by $10,000 for the year. What predetermined overhead rate per direct labor hour was in effect during the year?

At the beginning of the year, Dalton Industries estimated manufacturing overhead would be $600,000 and the allocation base would be 40,000 machine hours. At the end of the year, actual manufacturing overhead was $635,000 and actual machine hours were 42,000. What was the status of manufacturing overhead at year-end?

Vanguard Machining applies overhead based on machine hours. The company's predetermined overhead rate is $22 per machine hour. During July, the company applied $187,000 in manufacturing overhead to its jobs. The company had budgeted 8,000 machine hours for July, but actual manufacturing overhead costs were $190,000. How many actual machine hours were worked in July?

A company has two production departments: Machining and Assembly. The Machining department bases its predetermined overhead rate on machine hours, while the Assembly department bases its rate on direct labor hours. Budgeted data for the year is as follows: Machining MOH $500,000, Machine Hours 25,000; Assembly MOH $300,000, Direct Labor Hours 20,000. Job #451 used 50 machine hours in Machining and 30 direct labor hours in Assembly. What is the total overhead applied to Job #451?

Triton Industries uses a flexible budget to estimate its manufacturing overhead costs, with the formula: Total MOH = $200,000 + $5.00 per direct labor hour. The company expects to operate at 80,000 direct labor hours for the upcoming year. What is the predetermined overhead rate per direct labor hour?

A company has a theoretical capacity of 100,000 machine hours and a practical capacity of 80,000 machine hours per year. Budgeted annual manufacturing overhead is $500,000. The company's policy is to base its predetermined overhead rate on practical capacity. During the year, the company actually worked 78,000 machine hours. What was the total overhead applied during the year?

At the start of the year, a company established its predetermined overhead rate based on $800,000 of estimated overhead and 50,000 estimated machine hours. In June, a major new customer order caused the company to revise its annual estimates to $900,000 of overhead and 60,000 machine hours. For the year, the company's actual results were 58,000 machine hours. What is the total overhead applied for the year?

Hydra Corp. plans to produce 80,000 units of its product next year. Each unit requires 0.25 machine hours to produce. Budgeted manufacturing overhead for the year is $300,000. The company uses machine hours as its overhead allocation base. What is the predetermined overhead rate per machine hour?

Lyra Corp. estimates it will incur $750,000 in manufacturing overhead costs next year. The company's primary cost driver is direct labor cost. The budget includes 25,000 direct labor hours at an average wage rate of $24 per hour. What is Lyra's predetermined overhead rate?

Southwest Fabrication calculated a predetermined overhead rate of $35 per machine hour based on estimated overhead of $875,000. During the year, 24,500 machine hours were actually used, and actual overhead costs were $847,500. At year-end, the Applied Overhead account shows a balance of $857,500. What was the estimated machine hour capacity used to calculate the predetermined overhead rate?