Question

ollowing 52. Kimble Company app data, compute overhead applier erhead for the . Civell the toll Nimble Company applies overhead on the basis of much compute overhead applied and the under- or overapplication of overhead period: Estimated annual overhead cost $1,600,000 Actual annual overhead cost $1,575,000 400,000 Estimated machine hours 390,000 Actual machine hours A) $1,560,000 applied and $15,000 underapplied B) $1,560,000 applied and $15,000 overapplied C) $1,575,000 applied and neither under-nor overapphe D) $1,600,000 applied and $15,000 overapplied Tollowing information, compute the cost of direct materials used. Raw materials inventory, January 1 $ 30,000 Raw materials inventory, December 31 60,000 Work in process, January 1 27,000 Work in process, December 31 18,000 Finished goods, January 1 60,000 Finished goods, December 31 48,000 Raw materials purchases 1,800,000 Direct labor 890,000 Factory utilities 225,000 Indirect labor 75,000 Factory depreciation 500,000 Operating expenses 630,000 A) $1,830,000. B) $1,800,000 C) $1,770,000 D) $1,740,000 54. If annual overhead costs are expected to be $750,000 and direct labor costs are expected to be $1,000,000, then if the activity base is direct labor costs: A) a predetermined overhead rate cannot be determined. B) $1.33 is the predetermined overhead rate. C) for every dollar of manufacturing overhead, 75 cents of direct labor will be assigned D) for every dollar of direct labor, 75 cents of manufacturing overhead will be assigned

Answer 1

Ans. 52	Option A
	Overhead applied = Estimated overhead cost / Estimated machine hours * Actual machine hours
	$1,600,000 / 400,000 * 390,000
	$1,560,000
	Under applied overhead = Actual overhead - Applied overhead
	$1,575,000 - $1,560,000
	$15,000
Ans. 53	Option C $1,770,000
	Particulars	Amount
	Beginning raw materials inventory	$30,000
	Add: Purchase of direct materials	$1,800,000
	Raw materials available	$1,830,000
	Less: Ending raw materials inventory	-$60,000
	Direct materials used (A)	$1,770,000
Ans. 54	Option   C
	Predetermined overhead rate   =   Budgeted overhead cost / Budgeted Direct labor cost
	$750,000 / $1,000,000
	$0.75	per direct labor cost
	Manufacturing overhead cost assigned will be calculated by using the following formula:
	Manufacturing overhead cost assigned = Direct labor cost * Predetermined overhead rate
	*So, it's clear that 75 cents ($0.75) of direct labor cost will be assigned to overhead cost
	assigned.
Ans. 55	Option D
	Explanations: All the given options are used in Activity based costing (ABC).
	Cost drivers are used to allocate activities as per allocation base.
	Estimated use of cost drivers per activity is used to calculate the activity rate.
	Estimated use of cost drivers per product is used to calculate the overhead cost assigned.
Ans. 56	Option   A   $44,400
	Particulars	Amount
	Direct materials	$22,800
	Direct labor cost	$9,600
	Overhead applied	$12,000
	Total manufacturing cost	$44,400
	*Calculations:
	Direct labor cost = Direct labor hours * Direct labor rate per hour
	600 * $16
	$9,600
	Overhead cost applied = Applied factory overhead rate * Machine hours used
	$30 * 400
	$12,000