The following information is available pertaining to the Production Division of
ID: 2411575 • Letter: T
Question
The following information is available pertaining to the Production Division of Clarkson Enterprises:
Assembly Dept. Finishing Dept. Total
Overhead costs $10,000 $30,000 $40,000
Direct labor hours 8,000 2,000 10,000
Machine hours 3,000 5,000 8,000
Production information pertaining to Job 4X5:
Assembly Dept. Finishing Dept. Total
Prime costs $2,380 $-0- $2,380
Direct labor hours 280 -0- 280
Machine hours -0- -0- -0-
Units produced 500 -0- 500
1. Refer to Figure 5-7. What is the plantwide overhead rate based on direct labor hours?
a. $1.00
b. $1.50
c. $3.00
d. $4.00
2. Refer to Figure 5-7. Using the plantwide overhead rate based on direct labor hours what is the cost of Job 4X5?
a. $1,250
b. $2,000
c. $8,750
d. $3,500
3. Refer to Figure 5-7. What is the overhead rate for the Finishing Department based on machine hours?
a. $6.00
b. $4.00
c. $2.25
d. $1.50
4. Refer to Figure 5-7. What are the total overhead costs assigned to Job 4X5, assuming the Assembly and Finishing Departments use direct labor hours and machine hours for their bases, respectively?
a. $62.50
b. $250.00
c. $350.00
d. $2,380.00
Figure 5-4
Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2014:
Materials placed into production $170,000
Indirect labor 40,000
Direct labor (10,000 hours) 160,000
Depreciation of factory building 60,000
Other factory overhead 100,000
Increase in work-in-process inventory 20,000
Factory overhead rate is $20 per direct labor hour.
5. Refer to Figure 5-4. What is the total amount credited to Materials Inventory for Lanyard in 2014?
a. $480,000
b. $170,000
c. $140,000
d. $110,000
6. Refer to Figure 5-4. What is the total amount debited to Finished Goods Inventory in 2011?
a. $490,000
b. $510,000
c. $450,000
d. $550,000
Explanation / Answer
Q1. Answer is d. $4 Explanation: Estimated overheads 40000 Divide: Labour hours 10000 OH rate per DLH 4 Q2. Answer is d. $ 3500 Explanation: Cost of Job 4X5 Prime Cost 2380 Oh (280 hrs @4) 1120 Total cost 3500 Q3. Answer is a. $ 6.00 Explanation: Estimated OH of finished deptt 30000 Divide: machine hours 5000 OH rate per MH 6 Q4. Answer is c. $ 350 Explanation: Assembly Oh (280*1.25 per DLH) 350 Finishing 0 Total OH cost of Job 4X5 350
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