Question : 41. A company produces heating elements that go through two : 1256569

 

 

41. A company produces heating elements that go through two operations, casting and assembling, before they are complete. Expected costs and activities for the two departments are shown below. Given this information, the departmental overhead rate for the assembling department based on direct labor hours is $5 per direct labor hour. 

 

Casting

Assembling

Direct labor hours

1,875 DLH

7,500 DLH

Machine hours

12,500 MH

3,750 MH

Overhead costs

$75,000

$37,500

 

 

 

 

 

 

42. A company produces paint that goes through two operations, operation A and operation B, before it is complete. Expected costs and activities for the two departments are shown below. Given this information, the departmental overhead rate for Department B based on machine hours is $4 per machine hour.  

 

Department

A

Department

B

Machine hours

50,000 MH

60,000 MH

Direct labor hours

78,500 DLH

100,800 DLH

Overhead costs

$392,500

$403,200

 

 

 

43. A company produces computer chips that go through two operations, operation A1 and operation B2, before they are complete. Expected costs and activities for the two departments are shown below.  Departmental overhead rates are based on machine hours in department A1 and direct labor hours in department B2. Therefore, the overhead rates for department A1 and department B2 are $3.62 per machine hour and $5.73 per direct labor hour, respectively.  

 

Department

A1

Department

B2

Machine hours

40,000 MH

30,000 MH

Direct labor hours

36,200 DLH

28,650 DLH

Overhead costs

$144,800

$171,900

 

 

 

 

44. A company produces garden benches that go through two operations, operation 1A1 and operation 2B2, before they are complete. Expected costs and activities for the two departments are shown below.  Both departments have departmental overhead rates based on machine hours. Therefore, the overhead rates for department 1A1 and department 2B2 are the same. 

 

Department

1A1

Department

2B2

Machine hours

70,000 MH

60,000 MH

Direct labor hours

56,350 DLH

50,160 DLH

Overhead costs

$225,400

$250,800

 

 

 

45. A company produces surgical equipment that goes through threes processes, 1A1, 2B2, and 3C3, before they are complete. Expected costs and activities for the three departments are shown below. All departments have departmental overhead rates based on direct labor hours. Therefore, the overhead rate for each department is $5 per direct labor hour. 

 

Department

1A1

Department

2B2

Department

3C3

Machine hours

15,000 MH

25,000 MH

20,000 MH

Direct labor hours

22,830 DLH

10,650 DLH

29,200 DLH

Overhead costs

$114,150

$213,000

$73,000

 

 

 

46. Activity-based costing involves four steps: (1) identify activities and the costs they cause, (2) group similar activities into cost pools, (3) determine an activity rate for each activity cost pool, and (4) allocate overhead costs to products using those activity rates.

 

 

47. The more activities tracked by activity-based costing, the more accurately overhead costs are assigned.

 

 

48. In activity-based costing, an activity can involve several related tasks.

 

 

49. Activities causing overhead cost in an organization are typically separated into four levels: (1) direct activities, (2) indirect activities, (3) batch level activities, and (4) facility level activities.

 

 

50. Machine setup costs are an example of a batch level activity.