Question :
Answer the following questions using the information below:
Gibson Manufacturing a : 1217173
Answer the following questions using the information below:
Gibson Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Winfield High School band jacket job.
CompanyWinfield High School Job
Direct materials $40,000 $1,000
Direct labor $10,000 $200
Manufacturing overhead costs $30,000
Machine-hours 100,000 mh 900 mh
11) For Gibson Manufacturing, what is the annual manufacturing overhead cost-allocation rate?
A) $0.50
B) $0.80
C) $0.30
D) $33.33
12) What amount of manufacturing overhead costs will be allocated to this job?
A) $270
B) $720
C) $450
D) $30,000
13) What are the total manufacturing costs of this job?
A) $1,200
B) $1,470
C) $1,650
D) $1,920
14) What is the bid price for the Winfield High School job if the company uses a 40% markup of total manufacturing costs?
A) $2,310
B) $588
C) $1,680
D) $2,058
Answer the following questions using the information below:
Apple Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are:
Department ADepartment B
Direct materials $700,000 $100,000
Direct manufacturing labor $200,000 $800,000
Manufacturing overhead $600,000 $400,000
The actual material and labor costs charged to Job #432 were as follows:
Total
Direct materials: $25,000
Direct labor:
Department A $ 8,000
Department B $12,000
$20,000
Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year.
15) For Department A, the manufacturing overhead allocation rate is:
A) 33%
B) 66%
C) 300%
D) 100%
16) For Department B, the manufacturing overhead allocation rate is:
A) 50%
B) 100%
C) 200%
D) 300%
17) Manufacturing overhead costs allocated to Job #432 total:
A) $30,000
B) $12,000
C) $24,000
D) $36,000
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 20X3:
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 60,000dlh
18) What are the budgeted direct-cost rate and the budgeted 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
19) How much should a client be billed in a normal costing system when 1,000 professional labor-hours are used?
A) $32,000
B) $29,800
C) $35,200
D) $27,000
C) [($100,000 × 12) + ($29,000 × 10)] / 50,000 × 1,000 = $29,800
+ $270,000 / 50,000 × 1000 × 1,000 = $5,400
$29,800 + $5,400 = $35,200
20) When a normal costing system is used, clients using proportionately more attorney time than paraprofessional time will:
A) be overbilled for actual resources used
B) be underbilled for actual resources used
C) be billed accurately for actual resources used
D) result in an underallocation of direct costs
