Pre Determined Overhead Rate

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Pre Determined Overhead Rate Questions and Answers

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Explain why a single plantwide overhead rate can distort the cost of a particular product.
Johansen Company has the following estimated costs for the next year: Direct materials $ 6,000 Direct labor $ 100,000 Rent on factory building $ 15,000 Sales salaries $ 25,000 Depreciation on...
Cribb Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 17,900 hours and the total estimated manufacturing...
The Meyers CPA firm has the following overhead budget for the year: Particulars Amount ($) Overhead Indirect materials 310,000 Indirect labor 1,615,000 Depreciation-building 295,000 Depreciation-...
A manufacturing company allocates overhead at a fixed rate of $65 per hour based on direct labor hours. During the month, total overhead incurred was $280,000, and the total direct labor hours work...
A company produces two products, good and better. The company uses a cost system that includes several cost pools but only one cost driver, machine hours. Based on the information below, determine...
Provide the entry to assign overhead to production for a given period, assuming that the overhead rate is 150 percent of direct labor cost and that $80,000 of direct labor cost was incurred in that...
Work A Work B Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead 11,500 15,900 27,400 Estimated variable manufacturing overhead per machine-hour...
Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from any other, company a...
Cindy Inc. estimates that its employees will utilize 125,000 machine hours during the coming year. Total overhead costs are estimated to be $4,500,000 and direct labor hours are estimated to be 100...
Harms Shoe Company applies manufacturing overhead based on direct labor hours as the allocation volume. Information concerning manufacturing overhead and labor for July follows: Estimated direct la...
Peterson Company estimates that overhead costs for next year will be 3,900,000 for indirect labor and 980,000 for factory utilities. The company uses machine hours as its overhead allocation base....
Digger Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year. Budgeted Actual Overhead cost $1,122,000 $1,092,000 Machine hours 56,200...
Alpha Company estimates that annual manufacturing overhead cost will be $900,000. Estimated annual operating activities are: direct labor cost $450,000, direct labor hours 300,000 and machine hours...
Overhead application is arbitrary. True False
A company allocates overhead based upon the number of shoes produced. The company estimates the following costs and shoe production for the upcoming year: Estimated total overhead: $1,250,000 Estim...
Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:
Xie Company identified the following activities costs and activity drivers for 2015. The company manufactures two types of go-karts: Activity Expected; Cost Expected Activity Handling materials 6...
Canoe Company's manufacturing accounting system uses direct labor costs to apply overhead to goods in process and finished goods inventories. Canoe Company's manufacturing costs for the year were:...
The R&R Company's manufacturing costs for August are: direct labor, $26,500; indirect labor, $11,000; direct materials, $30,300; taxes on raw materials and work in process, $1,700; heat, lights, an...
Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $9,500,000 (950,000 hours at $10/hour) and that factory overhead would be $6,00...
Jones Manufacturing Company makes two products. The company s budget includes $430,100 of overhead. In the past, the company allocated overhead based on estimated total direct labor hours of 18,700...
Byrds Corporation uses a predetermined overhead rate based on machine-hours to apply overhead to the manufacturing process. Last year, Byrds incurred manufacturing overhead costs totaling $225,000...
Chandler Hals Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Chandler expects to incur $360,000 of overhead costs during the next fiscal year. Other budget inf...
Mccoo Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.90 per direct labor-hour. The company's budgeted fixed manufacturing overhead is...
Overhead is applied on the basis of machine hours. It takes 3 machine hours to produce a large doll house and 2 machine hours to produce a small doll house. EDHC produces 2,000 large doll houses an...
At the beginning of a year a company predicts total direct materials costs of $1,010,000 and total overhead costs of $1, 270,000. If the company uses direct materials costs as its activity base to...
ABC Company made the following estimates for the current year: The predetermined department overhead rate for assembly based on direct labor hours would be: (blank).
How much does a pound of jelly beans cost to make?
Mariposa, Inc., produces machine tools and currently uses a plant wide overhead rate, based on machine hours. Harry Whipple, the plant manager, has heard that departmental overhead rate can offer s...
World Company expects to operate at 80% of its productive capacity of 70,000 units per month. At this planned level, the company expects to use 25,200 standard hours of direct labor. Overhead is allo
Velshi Printers has contracts to complete weekly supplements required by forty-sex customers. For the year 2010, manufacturing overhead cost estimates total $840,000 for an annual production capaci...
Keenan Company estimates that total factory overhead costs will be $300,000 for the year. Direct labor hours are estimated to be 30,000 a. For Keenan Company, determine the predetermined factory ov...
Given the following selected account balances of Shanta Company. Prepare its manufacturing statement for the year ended on December 31, 2013. Sales $1,100,000 Raw materials inventory, Dec. 31, 2012...
Addy Company makes two products: Product A and Product B Annual production and sales are 1,500 units of Product A and 1,100 units of Product B. The company has traditionally used direct labor hours...
What percent of private practice physician revenue (US) is used to cover overhead costs from 1960-2011?
What percentage of total costs is direct labor when your overhead costs are 350% of direct labor?
Buckhorn Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below. Estimated machine hours 85,000, Estimated v...
Calculate the fully loaded cost of labor for your Project Engineer using the following data: a. Hourly rate: $40/hr b. Estimated hours of work: 120 c. Overhead rate: 65% d. Personal time: 15%
Simoneaux Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the mac...
Julio produces two models of calculator, standard and deluxe. The company is currently using a traditional costing system with machine hours as the cost driver but is considering a move to activity...
High Desert Pottery works make a variety of pottery products that it sells to retailers. The company uses a job-order costing system in which departmental predetermined overhead rates are used to a...
Aztec Industries produces bread which goes through two operations, mixing and baking, before it is ready to be packaged. Next year's expected costs and activities are shown below: Mixing Baking Di...
Solomon Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows: Expected Costs Direct labor Direct...
Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Raw materials $60,500 Work in process 20,800 Finished goods 57,60...
The Acme Corporation's FRPA with the government contained a manufacturing overhead rate of 200% based on an overhead expense pool of $36M and a manufacturing labor base of $18M (based on 3 contract...
During the first quarter, Bramble Company incurs the following direct labor costs: January $55,300, February $46,900, and March $64,400. For each month, indicate the amount of overhead assigned to...
World Company expects to operate at 60% of its productive capacity of 19,000 units per month. At this planned level, the company expects to use 4,560 standard hours of direct labor. Overhead is all...
Sanderlin Corporation has two manufacturing departments Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: During t...
Use the information provided below to answer the question. Guitar Monopoly Thor Total Cost Direct Materials $300,000 $450,000 $1,500,000 Direct Labor $20,000 $30,000 $60,000 Overhead Setup 1...
World Company expects to operate at 70% of its productive capacity of 21,000 units per month. At this planned level, the company expects to use 14,700 standard hours of direct labor. Overhead is al...
1. Marquis Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are direct labor cost $500,000, direct labor hours 50,000, and mach...
Spruce Company uses a job costing system. Spruce Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31. Cost of goods manufactured $ 124,000 C...
Greenwood Company manufactures two products 14,000 units of Product Y and 6,000 units of Product Z. The company uses a plant wide overhead rate based on direct labor hours. It is considering Imple...
Bravo Company uses a job order cost system and applies overhead based on estimated rates. The overhead application rate is based on total estimated overhead costs of $270,000 and direct labor hours...
For each of the following independent cases (A-E), compute the missing values in the table: Case Prime Cost Conversion Cost Direct Materials Direct Labor Manufacturing Overhead Total Manufacturing...
Logan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 29,000 direct labor-hours would be required for...
Daget Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $364,380. At the end of the year, actual d...
The following information has been gathered for Foxmoor Industries for its fiscal year ending December 31: |Estimated factory overhead cost|$1,500,000 |Actual factory overhead cost|$1,776,400 |E...
Pro Tool Company expects to produce 13,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: ACTIVITIES: UNIT LEVEL BATCH...
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