Question 1. When the allocated amount of indirect costs are less than the actual amount, indirect costs have been:
a. underallocated
b. underapplied
c. overabsorbed
d. Both underapplied and underallocated are correct.
Question 2. For 20X5, Marcotte's Animal Supply Manufacturing uses machine-hours as the only overhead cost-allocation base. The accounting records contain the following information:
Estimated Actual
Manufacturing overhead costs $100,000 $120,000
Machine-hours 20,000 25,000
Using normal costing, the amount of manufacturing overhead costs allocated to jobs during 20X5 is:
a. $100,000
b. $120,000
c. $150,000
d. $125,000
Question 3. For 20X5, Marcotte's Animal Supply Manufacturing uses machine-hours as the only overhead cost-allocation base. The accounting records contain the following information:
Estimated Actual
Manufacturing overhead costs $100,000 $120,000
Machine-hours 20,000 25,000
Using job costing, the 20X5 actual indirect-cost rate is:
a. $4.00 per machine-hour
b. $6.00 per machine-hour
c. $5.00 per machine-hour
d. $4.80 per machine-hour
Question 4. Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year:
Machining Assembly
Direct manufacturing labor-hours 10,000 50,000
Machine-hours 40,000 20,000
Manufacturing overhead $200,000 $400,000
A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is:
a. $ 8 per direct labor-hour
b. $10 per direct labor-hour
c. $20 per direct labor-hour
d. None of these answers is correct.
Question 5. Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year:
Machining Assembly
Direct manufacturing labor-hours 10,000 50,000
Machine-hours 40,000 20,000
Manufacturing overhead $200,000 $400,000
The budgeted indirect-cost driver rate for the Machining Department based on the number of machine-hours in that department is:
a. $5 per machine-hour
b. $10 per machine-hour
c. $20 per machine-hour
d. None of these answers is correct.
Question 6. All of the following items are debited to Work-in-Process EXCEPT:
a. direct labor consumed
b. allocated manufacturing overhead
c. completed goods being transferred out of the plant
d. direct materials consumed
Question 7. LeBlanc Company has the following balances as of the year ended December 31, 20X5.
Direct Materials Inventory $15,000 Dr.
WIP Inventory 34,500 Dr.
Finished Goods Inventory 49,500 Dr.
Factory Department Overhead 4,000 Dr.
Cost of Goods Sold 74,500 Dr.
Additional information is as follows:
Cost of direct materials purchased during 20X5 $41,000
Cost of direct materials requisitioned in 20X5 47,000
Cost of goods completed during 20X5 102,000
Factory overhead applied (120% of direct labor) 48,000
Required:
a. Compute beginning direct materials inventory.
b. Compute beginning WIP inventory.
c. Compute beginning finished goods inventory.
d. Compute actual factory overhead incurred.