Question : 51. Mickey & Co. expects overhead costs of $30,000 per month : 1208195

51. Mickey & Co. expects overhead costs of $30,000 per month and direct production costs of $12 per unit. The estimated production activity for the 2012 accounting period is as follows:
  
The predetermined overhead rate based on units produced is (rounded to the nearest penny) is: 
A. $0.75 per unit.
B. $9.00 per unit.
C. $1.33 per unit.
D. $21.00 per unit.

52. GJG Company paid its annual property tax of $12,000 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. $1,000 of the property tax cost should be allocated to the January production.
B. $3,000 of the property tax cost should be allocated to the January production.
C. $12,000 of the property tax cost should be assigned to the January production.
D. $900 of the property tax cost should be allocated to the January production.

53. Ditzel Manufacturing Company uses a cost-plus pricing strategy. At the beginning of 2012, Ditzel estimated that total annual fixed overhead costs would amount to $30,000. Further, Ditzel estimated that the annual volume of production would be 1,000 units of product. Based on these estimates, Ditzel 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 $28,000. Based on this information alone: 
A. Too high a selling price was assigned to products in 2012.
B. Too low a selling price was assigned to products in 2012.
C. The correct selling price was assigned to products in 2012.
D. The answer cannot be determined from the information provided.

54. First 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 more 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.

55. 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.

56. Which of the following is not a joint product with the other products listed? 
A. Eggs
B. Cream
C. Butter
D. Cheese

57. Joint products A and B emerge from common processing that costs $80,000 and yields 5,000 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 A if joint costs are allocated on the basis of number of units produced? 
A. $35,556
B. $48,780
C. $31,220
D. $44,444

58. Joint products A and B emerge from common processing that costs $100,000 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? 
A. $37,500
B. $50,000
C. $62,500
D. $66,665

59. Financial reporting standards require that joint costs: 
A. Be allocated to the joint products.
B. Be assigned to the product produced in the largest quantity.
C. Be assigned to the product with the highest sales value.
D. Be treated as a period cost and expensed immediately.

60. Allocation of costs to various cost objects: 
A. May affect managers’ performance evaluation.
B. May affect resource allocations within a company.
C. May affect the apparent profitability of the various products a company makes.
D. All of the other answers are correct.