Question : 31. Griffin Manufacturing uses job order costing to measure and track : 1295565

 

 

31. Griffin Manufacturing uses job order costing to measure and track the costs incurred for specific jobs. While most of the jobs do require some machine time, Griffin has determined that direct labor cost drives its manufacturing overhead costs. During the month of August, the following data were available for Job #45: 

 

Direct labor ——————

200 hours at $15 per hour

 

Direct materials ————-

90 gallons at $6 per gallon

 

Machine hours used ——–

100 hours

 

 

 

If total overhead costs during the month totaled $4,000 when a total of $20,000 in direct labor costs were incurred, what will be the total manufacturing cost of Job #45? A. $4,140B. $3,580C. $7,540D. $3,540

 

32. Benjamin Products uses job order costing and assigns overhead to specific jobs using direct labor hours. During the month of June, a total of 1,800 direct labor hours at a cost of $14 per hour were incurred for all jobs. Actual overhead costs for the month totaled $4,500. If a specific job required 32 direct labor hours of work, how much overhead should be applied to that job? A. $179.20B. $  12.80C. $  80.00D. $448.00

 

33. Which of the following statements regarding plantwide overhead rates is true? A. As the number of diverse products a company makes increases, the likelihood that a plantwide overhead rate will be accurate increases.B. Plantwide overhead rates must use machine hours as their cost driver.C. As the number of diverse products a company makes increases, the likelihood that a company will replace a plantwide overhead rate with a departmental overhead rate increases.D. Plantwide overhead rates are usually more costly to prepare than a departmental overhead rate.

 

34. Which of the following statements regarding plantwide versus departmental overhead rates is true? A. Departmental overhead rates usually provide more accurate cost information.B. Plantwide overhead rates are usually more expensive to implement.C. Departmental overhead rates are usually less time consuming to implement.D. Plantwide overhead rates are more likely to be used as products become more diverse.

 

35. Carla’s Bakery has recently expanded its operations to include private-party catering. Prior to this expansion, Carla used a plantwide overhead rate with machine hours as the cost driver. Now, due to the expansion, Carla would like to implement departmental overhead rates. She will continue to use machine hours as the cost driver for the bakery division but will use direct labor hours for the catering division. The following is a breakdown of product costs and other data for the two divisions for the month of May: 

 

 

______Bakery_______

______Catering_______

 

Direct labor hours ——-

500 hours at $10 per hour

200 hours at $15 per hour

 

Machine hours ———–

200 hours

30 hours

 

 

 

 

If total overhead for the month of May was $5,000, with $3,500 allocated to the bakery and $1,500 allocated to catering, what are the overhead rates for the bakery and catering divisions, respectively? A. Bakery: $25.00 per machine hour; Catering: $25.00 per direct labor hourB. Bakery: $5.00 per machine hour; Catering: $6.52 per direct labor hourC. Bakery: $12.50 per machine hour; Catering: $12.50 per direct labor hourD. Bakery: $17.50 per machine hour; Catering: $7.50 per direct labor hour

 

36. City Doughnuts recently expanded its eat-in doughnut business to include the wholesale market where doughnuts will be sold in local grocery stores. City Doughnuts makes the doughnuts for its eat-in business on the premises (Department A), but has recently rented a separate factory to use solely for its wholesale business (Department B).The company used to use direct labor hours as its plantwide overhead rate. But now, due to the heavily automated factory, would like to start using departmental overhead rates using different cost drivers. The following information is available for the month of April: 

 

Department “A” ___Doughnuts___

Department “B” ___Doughnuts___

Total overhead allocated by department

$3,000

$4,000

Overhead cost driver

direct labor hours

machine hours

Number of direct labor hours

200 hours

—-

Number of machine hours

—-

250 hours

Direct labor hours per dozen doughnuts

4 minutes

—-

Machine hours per dozen doughnuts

—-

3 minutes

 

 

 

What is the overhead cost per dozen doughnuts for Department A and Department B, respectively? A. Department A: $.27 per dozen doughnuts; Department B: $.1875 per dozen doughnutsB. Department A: $1.00 per dozen doughnuts; Department B: $.80 per dozen doughnutsC. Department A: $15 per dozen doughnuts; Department B: $16 per dozen doughnutsD. Department A: $3.75 per dozen doughnuts; Department B: $5.33 per dozen doughnuts

 

37. When using job-order costing, which of the following costs is the least likely to be known in a timely enough manner for decision-making purposes? A. Direct laborB. Administrative salariesC. Direct materialsD. Manufacturing overhead

 

38. Why do many managers desire to use a predetermined overhead rate instead of an actual overhead rate? A. Because it is impossible to ever know actual overhead costs.B. Because predetermined overhead rates are more accurate than actual overhead rates.C. Because actual overhead amounts are often not known in a timely enough manner to make decisions.D. Because the use of predetermined overhead rates will always result in lower product prices.

 

39. Which of the following is not true regarding predetermined overhead rates? A. They are useful in estimating product costs before actual overhead amounts are known with certainty.B. They can normalize seasonal and random fluctuations in overhead costs so that product costs will be consistent throughout the year.C. With their use, it is no longer necessary to be able to identify a cost driver.D. With their use, too much or too little overhead may end up being allocated to a product or job.

 

40. The formula for calculating the predetermined overhead rate is: A. Actual overhead for the cost pool ? Estimated units of the cost driverB. Estimated overhead for the cost pool ? Actual units of the cost driverC. Actual overhead for the cost pool ? Actual units of the cost driverD. Estimated overhead for the cost pool ? Estimated units of the cost driver

 

 

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