Question

20. Amelia Company had the following information for the year: Direct materials used S295,000 Direct labor incurred (9,000 hours) $245.000 Actual manufacturing overhead incurred $343,000 Amelia Company used a predetermined overhead rate using estimated overhead of S320,000 and 8,000 estimated direct labor hours. How much overhead was applied during the year? A. $245.000 B. $343.000 C. $360,000 D. $320,000 21. Pima, Inc. manufactures calculators that sell for $40 each. Each calculator uses S15 in direct materials and $5 in direct labor per unit. Pima has two activities: Machining, which is applied at the rate of $4 per machine hour, and Finishing, which is applied at the rate of $20 per batch. This month, Pima made 400 calculators, using 1,000 machine hours in 40 batches. What is the total manufacturing cost for one calculator? A. $20 B. $25 C. $27 D. $32 22. Life cycle cost management takes into consideration the fact that costs and revenues A. are higher in the early stages of the product life cycle than in later stages. B. are not constant across different stages of the product's life cycle. C. slow down in the maturity stage of the product life cycle. D. are higher when products use more activities. 23. An equivalent unit is calculated by A. dividing the number of physical units by their percentage of completion B. multiplying the number of physical units by their percentage of completion C dividing the number of physical units into direct materials and conversion costs. D. subtracting the number of physical units in ending Work in Process Inventory from the total number of physical units. 24. Which of the following is a requirement under the Sarbanes-Oxley Act? A. Financial statements must be audited by a Big Four accounting firm. B. Management must issue a report that indicates whether the financial statements are free of error. C. Management must conduct a review of the company's internal control system D. Background checks must be performed on all employees. 25. What determines the difference between a variable and a fixed cost? A. Whether it changes when activity levels change. B. Whether it is relevant to a particular decision. C. Whether it can be traced to a specific cost object. D. Whether it is related to manufacturing or nonmanufacturing activities. 26. A cost is $50,000 when 25,000 units are produced, and $100,000 when 50,000 units are produced This is an example of an) A. fixed cost. B. direct cost. C. variable cost. D. indirect cost.

Answer 1

20) Overhead rate = $360,000

Explanation:-

Predetermined overhead rate = 320,000/8000 = $40

Applied manufacturing overhead = $40*9000 = $360,000

21) Total manufacturing costs = Direct materials + Direct labor + Overhead

= 15+5+[(4*1000)/400]+[(20*40)/400]

= $32

22) Option B is correct.

Are not constant across different stages of the product's life cycle.

23) An equivalent unit is calculated by

b. Multiplying the number of physical units by their percentage of completion.

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