Ch 19 LO 3 PDOHR

Which of the following will be categorized as a manufacturing overhead cost?

• administration charges of showroom
• wages paid to assembly line workers
• depreciation on factory plant and equipment
• cost of direct materials used

Which of the following will be debited to the Manufacturing Overhead account of a watch manufacturer?

• salaries paid to accountants
• factory electricity costs
• office telephone costs
• cost of printing brochures

Which of the following correctly describes the term cost driver?

• the inflation rate that causes costs to rise
• the primary factor that causes a cost to be incurred
• the average inventory costs incurred at any point of time
• the total material, labor, and overhead costs of a completed job

The predetermined overhead allocation rate is the rate used to ________.

• assign direct material costs to jobs
• allocate estimated manufacturing overhead costs to jobs
• trace manufacturing and non manufacturing costs to jobs
• allocate actual manufacturing overhead costs incurred during a period

The predetermined overhead allocation rate is calculated by dividing ________.

• the actual overhead costs by actual amount of the cost driver or allocation base
• the estimated amount of cost driver by actual total overhead costs
• the estimated overhead costs by total estimated quantity of the overhead allocation base
• the total estimated overhead costs by total number of days in a year

The predetermined overhead allocation rate for a given production year is calculated ________.

• at the end of the production year
• after the preparation of financial statements for the year
• after completion of each job
• before the accounting period begins

Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $750,000 and $530,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 18,000 hours and 8,000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)

• $66.25 per machine hour
• $93.75 per machine hour
• $29.44 per labor hour
• $1.42 per labor hour

Zephyros Corporation had estimated manufacturing overhead costs for the coming year to be $318,000. The total estimated direct labor hours and machine hours for the coming year are 7,000 and 11,000, respectively. Manufacturing overhead costs are allocated based on direct labor hours. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)

• $1.57 per machine hour
• $17.67 per direct labor hour
• $45.43 per direct labor hour
• $28.91 per machine hour

• A. $34.87
• $1.88
• $32.69
• $61.67