Question :
41.Michael & Co. expects overhead costs of $60,000 per month : 1257130
41.Michael & Co. expects overhead costs of $60,000 per month and direct production costs of $24 per unit. The estimated production activity for the 2013 accounting period is as follows: The predetermined overhead rate based on units produced is (rounded to the nearest penny) is:
A. $1.50 per unit.
B. $2.67 per unit.
C. $18.00 per unit.
D. $42.00 per unit.
42.Jiminez Company paid its annual property tax of $6,000 on its manufacturing facility in January. The company expects to make 4,000 units of product during the year. During January, 300 units of product were produced. Based on this information:
A. $450 of the property tax cost should be allocated to the January production.
B. $1,500 of the property tax cost should be allocated to the January production.
C. $6,000 of the property tax cost should be assigned to the January production.
D. $500 of the property tax cost should be allocated to the January production.
43.Danforth Manufacturing Company uses a cost-plus pricing strategy. At the beginning of 2013, Danforth estimated that total annual fixed overhead costs would amount to 60,000. Further, Danforth estimated that the annual volume of production would be 1,000 units of product. Based on these estimates, Danforth computed a predetermined overhead rate that was used to allocate overhead cost to the products made throughout the year. As predicted, the actual volume of production amounted to 1,000 units of product. However, actual fixed overhead costs amounted to $56,000. Based on this information alone:
A. a lower than appropriate selling price was assigned to products in 2013.
B. a higher than appropriate selling price was assigned to products in 2013.
C. the correct selling price was assigned to products in 2013.
D. the answer cannot be determined from the information provided.
44.Herald Manufacturing Company uses a predetermined overhead rate to allocate fixed manufacturing overhead to production on a monthly basis. At the end of the accounting period it was determined that actual overhead cost was less than the estimated overhead cost and that the actual volume of production was higher than estimated. Based on this information alone:
A. The correct amount of cost was assigned to products during the accounting period.
B. Too much cost was assigned to products during the accounting period.
C. Too little cost was assigned to products during the accounting period.
D. The answer cannot be determined from the information provided.
45.Which of the following is not a true statement regarding the pooling of indirect costs?
A. Costs that have been pooled for one purpose may require disaggregation for a different purpose.
B. Pooling costs that have different cost drivers may result in unreliable cost allocation.
C. A single cost pool will have more than one cost driver for different cost objects.
D. Pooled costs may require disaggregation when allocating costs for different purposes.
46.Which of the following is not a joint product with the other products listed?
A. Cheese
B. Cream
C. Butter
D. Eggs
47.Joint products A and B emerge from common processing that costs $150,000 and yields 8,000 units of Product A and 4,000 units of Product B. Product A can be sold for $100 per unit. Product B can be sold for $80 per unit. What amount of the joint costs will be assigned to Product B if joint costs are allocated on the basis of number of units produced? (Do not round your intermediate calculations.)
A. $42,857
B. $66,667
C. $50,000
D. $100,000
48.Joint products A and B emerge from common processing that costs $200,000 and yields 2,000 units of Product A and 1,000 units of Product B. Product A can be sold for $100 per unit. Product B can be sold for $120 per unit. How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values? (Do not round your intermediate calculations.)
A. $75,000
B. $125,000
C. $100,000
D. $133,333
49.Financial reporting standards require that joint costs:
A. Be treated as a period cost and expensed immediately.
B. Be assigned to the product produced in the largest quantity.
C. Be assigned to the product with the highest sales value.
D. Be allocated to the two or more joint products.
50.Allocation of costs to various cost objects:
A. may affect managers’ performance evaluation.
B. may affect the overall profitability of a company.
C. may affect the apparent profitability of the various products a company makes.
D. Both may affect managers’ performance evaluation and may affect the apparent profitability of the various products a company makes are correct.
