Jan 15 Work in Process 168,000 Cash 168,000 Jan 15 Materials 168,000 Work in Pro
ID: 2550863 • Letter: J
Question
Jan 15 Work in Process 168,000
Cash 168,000
Jan 15 Materials 168,000
Work in Process 168,000
Jan 15 Work in Process 168,000
Materials 168,000
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $675,000 and direct labor hours would be 45,000. Actual factory overhead costs incurred were $725,000, and actual direct labor hours were 48,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?
$5,000 underapplied
$45,000 overapplied
$45,000 underapplied
$5,000 overpplied
*Given the following cost and activity observations for Bounty Company’s utilities, Bounty’ variable utilities costs per machine hour is equal to:
Total cost Machine Hours
March 6200 30,000
April 5,400 20,000
May 5,800 24,000
June 7,600 32,000
$0.11
$0.11
$0.27
$0.20
ABC Company sells 25,000 units at $25 per unit. Variable costs are $15 per unit, and fixed costs are $75,000. The contribution margin ratio and the unit contribution margin are:
40% and $10 per unit
40% and $15 per unit
60% and $15 per unit
60% and $10 per unit
Bobby Co. sells two products, X and Y. Last year, Bobby sold 18,000 units of X's and 12,000 units of Y's. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products are provided below.
Product selling price variable cost per unit contribution margin
x 180 100 80
Y 100 60 40
Jan 15 Work in Process 168,000 Factory Overhead 168,000Jan 15 Work in Process 168,000
Cash 168,000
Jan 15 Materials 168,000
Work in Process 168,000
Jan 15 Work in Process 168,000
Materials 168,000
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $675,000 and direct labor hours would be 45,000. Actual factory overhead costs incurred were $725,000, and actual direct labor hours were 48,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?
$5,000 underapplied
$45,000 overapplied
$45,000 underapplied
$5,000 overpplied
*Given the following cost and activity observations for Bounty Company’s utilities, Bounty’ variable utilities costs per machine hour is equal to:
Total cost Machine Hours
March 6200 30,000
April 5,400 20,000
May 5,800 24,000
June 7,600 32,000
$0.11
$0.11
$0.27
$0.20
ABC Company sells 25,000 units at $25 per unit. Variable costs are $15 per unit, and fixed costs are $75,000. The contribution margin ratio and the unit contribution margin are:
40% and $10 per unit
40% and $15 per unit
60% and $15 per unit
60% and $10 per unit
Bobby Co. sells two products, X and Y. Last year, Bobby sold 18,000 units of X's and 12,000 units of Y's. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products are provided below.
Product selling price variable cost per unit contribution margin
x 180 100 80
Y 100 60 40
Explanation / Answer
1)correct option is "A" -- 5000 underapplied
Actual overhead = 725000
Predetermined overhead : 675000/ 45000 = $ 15 per DLH
Applied overhead : 15*48000 = 720000
underapplied overhead 725000-720000= 5000
2)Highest activity 32000 hours - 7600
lowest activity 20000 - 5400
variable cost =change in cost /change in hours
[7600-5400]/[32000-20000]
2200/12000
$ .18 per hour
none of option given is correct]
3)correct option is "A"
Unit contribution margin : price -variable cost
= 25-15
= 10
contribution margin ratio = 10/25 =.40 or 40%
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