Question : Objective 4.5 1) The budgeted indirect-cost rate calculated: A) at the beginning : 1217172

 

Objective 4.5

 

1) The budgeted indirect-cost rate is calculated:

A) at the beginning of the year

B) during the year

C) at the end of each quarter

D) at the end of the year

2) The difference between actual costing and normal costing is:

A) normal costing uses actual quantities of direct-costs

B) actual costing uses actual quantities of direct-costs

C) normal costing uses budgeted indirect-costs

D) actual costing uses actual quantities of cost-allocation bases

 

3) Which of the following statements about normal costing is true?

A) Direct costs and indirect costs are traced using an actual rate.

B) Direct costs and indirect costs are traced using budgeted rates.

C) Direct costs are traced using a budgeted rate, and indirect costs are allocated using an actual rate.

D) Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate.

 

4) When using a normal costing system, manufacturing overhead is allocated using the ________ manufacturing overhead rate and the ________ quantity of the allocation base.

A) budgeted; actual

B) budgeted; budgeted

C) actual; budgeted

D) actual; actual

 

5) Which of the following statements about actual costing and normal costing is true?

A) Manufacturing costs of a job are available earlier under actual costing.

B) Corrective actions can be implemented sooner under normal costing.

C) Manufacturing costs are available earlier under normal costing.

D) Both B and C are correct.

Answer the following questions using the information below:

 

For 2010, Jake’s Dog Supply Manufacturing uses machine-hours as the only overhead cost-allocation base. The accounting records contain the following information:

 

EstimatedActual

Manufacturing overhead costs              $200,000              $240,000

Machine-hours              40,000              50,000

 

6) Using job costing, the 2010 budgeted manufacturing overhead rate is:

A) $4.00 per machine-hour

B) $4.80 per machine-hour

C) $5.00 per machine-hour

D) $6.00 per machine-hour

 

7) Using normal costing, the amount of manufacturing overhead costs allocated to jobs during 2010 is:

A) $300,000

B) $250,000

C) $240,000

D) $200,000

Answer the following questions using the information below:

 

Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year:

 

MachiningAssembly

Direct manufacturing labor-hours              10,000              50,000

Machine-hours              40,000              20,000

Manufacturing overhead              $200,000              $400,000

 

8) A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is:

A) $ 8 per direct labor-hour

B) $10 per direct labor-hour

C) $20 per direct labor-hour

D) None of these answers is correct.

 

9) The budgeted indirect-cost driver rate for the Machining Department based on the number of machine-hours in that department is:

A) $5 per machine-hour

B) $10 per machine-hour

C) $20 per machine-hour

D) None of these answers is correct.

Answer the following questions using the information below:

 

Joni’s Kitty Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Mouse product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing labor-hours at $20 per hour; and a 20% markup rate on total manufacturing costs.

 

10) Manufacturing overhead cost estimates for this special order total:

A) $10,000

B) $30,000

C) $36,000

D) None of these answers is correct.