Question

In the manufacture of 10,000 units of a product, direct materials cost incurred was $170,500, direct labor cost incurred was $108,000, and applied factory overhead was $49,200. What is the total conversion cost?

a.$157,200

b.$49,200

c.$327,700

d.$170,500

The Thomlin Company forecasts that total overhead for the current year will be $11,136,000 with 196,000 total machine hours. Year to date, the actual overhead is $7,770,000 and the actual machine hours are 80,000 hours. The predetermined overhead rate based on machine hours is

Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.

a.$139 per machine hour

b.$57 per machine hour

c.$97 per machine hour

d.$40 per machine hour

For which of the following businesses would the job order cost system be appropriate?

a.canned soup processor

b.oil refinery

c.hospital

d.lumber mill

hich of the following is not a factory overhead allocation method?

a.multiple departmental rates

b.activity-based costing

c.single plantwide rate

d.factory costing

Which of the following is an example of a factory overhead cost?

a.president's salary

b.repair and maintenance cost on the administrative building

c.insurance premiums on salespersons' automobiles

d.factory heating and lighting cost

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $348,500 and direct labor hours would be 49,300. Actual manufacturing overhead costs incurred were $303,100, and actual direct labor hours were 54,000. The entry to apply the factory overhead costs for the year would include a

a.debit to Factory Overhead for $303,100

b.debit to Factory Overhead for $381,780

c.credit to Factory Overhead for $348,500

d.credit to Factory Overhead for $381,780

Answer 1

1. The correct answer is a. $157,200. Calculation is shown below:

Conversion Cost = Direct Labour costs + manufacturing overheads

= $(108,000 + 49,200)

= $157,200

2. Predetermined Overhead Rate = Total Estimated Overhead costs/ Estimated machine hours

= 11,136,000/196,000

= 56.816 rounded to $57 per machine hour

therefore, the correct answer is b. $57 per machine hour.

3. The correct answer is b. Oil refinery as in a oil refinery different products gets manufactured having significant cost for which job costing method can be used to compute the actual cost each product.

4. The correct answer is d. Factory Costing as there are various methods for factory overhead allocation but it does not include any Factory Costing method. Factory Cost is the name of the overhead instead of a method.

5. The correct answer is d. factory heating and lighting cost as all other options are not the part of manufacturing costs.

6. The correct answer is a. debit to Factory Overhead for $303,100 which are the actual overheads incurred during the year.