Week 2 Quiz
. (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.
Rate, based on budgeted factory overhead cost and budgeted activity, that is established before a period begins. 2,250,000/415,000
Budgeted activity units used in the denominator of the formula, more often called the denominator level, are measured in direct labor-hours, machine-hours, direct labor costs, or production units.
Read more: http://www.answers.com/topic/predetermined-overhead-rate#ixzz2NxCv9pKK
(b) Calculate the overhead applied.
Applied overhead = predetermined overhead rate x actual direct labor
(c) Determin Prorate the overhead variance to the appropriate accounts
765 - 750 = variance of 15K
Rate This Answer e the amount of overhead that is over/under applied.
2. (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
Labor rate variance = (Actual hours worked × Actual rate) − (Actual hours worked × Standard rate)
Read more at http://accounting4management.com/direct_labor_rate_variance.htm#pqUTOT7ClOOtMr4F.99
(b) Direct labor hours
(c) Machine hours
3. (TCO 1) List and briefly describe four of the five differences between managerial accounting and financial accounting
4. (TCO 2)The following information is available for Sappy’s Surgical Shears for the fiscal year ending December 31, 20XX. Beginning balance in Finished Goods $ 17,000 Ending balance in Finished Goods 15,200 Beginning
(a) Calculate the predetermined overhead rate.
Rate, based on budgeted factory overhead cost and budgeted activity, that is established before a period begins. 2,250,000/415,000
Budgeted activity units used in the denominator of the formula, more often called the denominator level, are measured in direct labor-hours, machine-hours, direct labor costs, or production units.
Read more: http://www.answers.com/topic/predetermined-overhead-rate#ixzz2NxCv9pKK
(b) Calculate the overhead applied.
Applied overhead = predetermined overhead rate x actual direct labor
(c) Determin Prorate the overhead variance to the appropriate accounts
765 - 750 = variance of 15K
Rate This Answer e the amount of overhead that is over/under applied.
2. (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
Labor rate variance = (Actual hours worked × Actual rate) − (Actual hours worked × Standard rate)
Read more at http://accounting4management.com/direct_labor_rate_variance.htm#pqUTOT7ClOOtMr4F.99
(b) Direct labor hours
(c) Machine hours
3. (TCO 1) List and briefly describe four of the five differences between managerial accounting and financial accounting
4. (TCO 2)The following information is available for Sappy’s Surgical Shears for the fiscal year ending December 31, 20XX. Beginning balance in Finished Goods $ 17,000 Ending balance in Finished Goods 15,200 Beginning