16) Managers and accountants collect most of the cost information that goes into their systems through ________.
A) an information databank
B) computer programs
C) source documents
D) time surveys
Answer the following questions using the information below:
For 2014, Bakers Manufacturing uses machine-hours as the only overhead cost-allocation base. The direct cost rate is $3.00 per unit. The selling price of the product is $20.00. The estimated manufacturing overhead costs are $240,000 and estimated 40,000 machine hours. The actual manufacturing overhead costs are $300,000 and actual machine hours are 50,000.
17) Using job costing, the 2014 actual indirect-cost rate is ________.
A) $6.00 per machine-hour
B) $5.80 per machine-hour
C) $6.50 per machine-hour
D) $6.75 per machine-hour
18) What is the profit margin earned if each unit requires two machine-hours?
A) 53.33%
B) 33.33%
C) 66.67%
D) 58.73%
19) Tiscara Company manufactures insulation and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labor-hour. The following data are obtained from the accounting records for June 2014:
Direct materials $440,000
Direct labor (3,500 hours @ $11/hour) 38,500
Indirect labor 15,000
Plant facility rent 50,000
Depreciation on plant machinery and equipment 35,000
Sales commissions 10,000
Administrative expenses 25,000
The actual amount of manufacturing overhead costs incurred in June 2014 totals ________.
A) $278,500
B) $100,000
C) $80,000
D) $110,000
Answer the following questions using the information below:
Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 2014:
BudgetActual
Indirect costs$270,000$300,000
Annual salary of each attorney$100,000$110,000
Annual salary of each paraprofessional$ 29,000$ 30,000
Total professional labor-hours 50,000 dlh 60,000 dlh
20) What are the actual direct-cost rate and the actual indirect-cost rate, respectively, per professional labor-hour?
A) $27.00; $4.17
B) $29.80; $5.40
C) $32.40; $5.00
D) $27.00; $5.00
21) How much should the client be billed in an actual costing system if 200 professional labor-hours are used?
A) $5,000
B) $6,960
C) $7,480
D) $6,400
22) If indirect-cost rates were based on actual short-term usage, periods of lower demand would result in lower costs per unit.
23) In job costing, only direct costs are used to determine the cost of a job.
24) Indirect manufacturing costs should be allocated equally to each job.
25) Each cost pool may have multiple cost allocation bases.
26) Normal costing is a costing system that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs.
