Question

Pinnacle Corp. budgeted $258,700 of overhead cost for the current year. Actual overhead costs for the year were $240,730. Pinnacle's plantwide allocation base, machine hours, was budgeted at 54,860 hours. Actual machine hours were 55,670.

A total of 108,360 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is:

a. $4.39 per machine hour b. $4.72 per machine hour c. $2.39 per machine hour d. $2.22 per machine hour

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Selected accounts with a credit amount omitted are as follows

Work in Process
Apr. 1	Balance	6,500	Apr. 30	Goods finished	X
30	Direct materials	55,700
30	Direct labor	190,500
30	Factory overhead	57,150

Finished Goods
Apr. 1	Balance	12,000
30	Goods finished	309,600

What was the balance of Work in Process as of April 30?

a. $250

b. $309,600

c. $12,000

d. $57,150

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When Job 117 was completed, direct materials totaled $28,160; direct labor, $33,958; and factory overhead, $20,707. A total of 3,313 units were produced at a per-unit cost of

a. $82,825

b. $3,313

c. $25

d. $62,118

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Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

	Activity Cost		Activity Base
Procurement	$344,000		Number of purchase orders
Scheduling	245,500		Number of production orders
Materials handling	429,500		Number of moves
Product development	727,000		Number of engineering changes
Production	1,445,000		Machine hours

	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	4,060	390	1,230	11	2,200	2,000
Tape drives	1,500	135	530	5	8,300	4,500
Wire drives	12,400	910	3,500	28	11,600	2,300

The activity rate for the procurement activity cost pool is

a. $65.38 per purchase order

b. $239.72 per purchase order

c. $171.08 per purchase order

d. $19.15 per purchase order

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Selected accounts with amounts omitted are as follows

Work in Process
Aug. 1	Balance	277,750	Aug. 31	Goods finished	153,780
31	Direct materials	X
31	Direct labor	35,400
31	Factory overhead	X

Factory Overhead
Aug. 1 – 31	Costs incurred	96,990	Aug. 1	Balance	15,200
			31	Applied
				(30% of direct labor cost)	X

If the balance of Work in Process on August 31 is $194,620, what was the amount debited to Work in Process for direct materials in August?

a. $353,990

b. $507,770

c. $118,530

d. $24,630

Answer 1

1) Overhead rate = 258700/54860 = 4.72 per MH

So answer is b) $4.72 per machine hour

2) Ending work in process = 6500+55700+190500+57150-309600 = 250

So answer is b) $250

3) Unit cost

Direct material	28160
Direct labor	33958
Overhead	20707
Total Cost	82825
Unit	3313
Unit cost	25

So answer is c) $25

4) Activity rate for procurement = 344000/17960 = 19.15 per purchase order

So answer is d) $19.15 per purchase order

5) Applied overhead = 35400*30% = 10620

Direct material = 153780+194620-10620-35400-277750 = 24630

So answer is d) $24630