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Managerial Accounting Quizes and Midterm

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Managerial Accounting Quizes and Midterm

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  • April 6, 2013
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| Question :| (TCO 2) Bubba’s Crawfish Processing Company uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $2,250,000 and direct labor hours are budgeted at 415,000 hours. Actual overhead was $2,200,000 and actual direct labor hours worked were 422,000.  

(a) Calculate the predetermined overhead rate.
(b) Calculate the overhead applied.
(c) Determine the amount of overhead that is over/underapplied.|
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 | Student Answer:|  | a) Calculate the predetermined overhead rate. 2250000/415000 = 5.4217 per hour (b) Calculate the overhead applied. 422000 x 5.4217 = 2287952 (c) Determine the amount of overhead that is over/under applied. 2287952-2200000 = 87952 over applied |  | Instructor Explanation:| (a) $2,250,000 / 415,000 hours = $5.42 per direct labor hour (DLH) (b) $5.42 DLH * 422,000 hours = $2,287,240

(c) Overapplied $87,240 ($2,287,240 - $2,200,000)|
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 | Points Received:| 6 of 6 |
 | Comments:| be sure to round rates to 2 decimal places. |
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 2.| Question :| (TCO 2) Thibodeaux Limousine Corporation is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $776,000. Budgeted machine hours are 105,000 hours, and budgeted labor hours are 17,500 hours at a rate of $10.00 per hour. Compute the predetermined overhead rate based on:  

(a) Direct labor dollars
(b) Direct labor hours
(c) Machine hours|
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 | Student Answer:|  | (a) Direct labor dollars 776000/17500 x 10 = 443.43% (b) Direct labor hours 776000/17500 =$44.34 per hour (c) Machine hours 776000/105000 = $7.39 per machine hour |  | Instructor Explanation:|

(a) $776,000 / (17,500 * $10.00) = 443%
(b) $776,000 / 17,500 = $44.34 DLH
(c) $776,000 / 105,000 = $7.39 per machine hour
 
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 | Points Received:| 6 of 6 |
 | Comments:| |
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 3.| Question :| (TCO 1) List and briefly describe four of the...