How is a predetermined overhead rate calculated?

Select one:

budgeted amount of cost driver/budgeted manufacturing overhead.

budgeted manufacturing overhead/budgeted amount of cost driver.

budgeted manufacturing overhead/budgeted amount of non-manufacturing overhead.

budgeted manufacturing overhead/ budgeted total expenses.

Professional entities such as law firms are likely to implement a system of:

Select one:

operational costing.

product costing.

job costing.

process costing.

Clear my choice

When manufacturing overhead is overapplied for the period, a method to re-set the balance of the account would be:

Select one:

debit manufacturing overhead, credit raw materials inventory.

debit manufacturing overhead, credit cost of goods sold.

debit work in process inventory, credit manufacturing overhead.

debit cost of goods sold, credit manufacturing overhead.

Which of the following represents a correct sequence in preparing a departmental production report?

Select one:

Analysis of total costs

analysis of physical flow of units

computation of unit costs

calculation of equivalent units

Analysis of physical flow of units

computation of unit costs

calculation of equivalent units

analysis of total costs

Analysis of total costs

calculation of equivalent units

computation of unit costs

analysis of physical flow of units

Analysis of physical flow of units

calculation of equivalent units

computation of unit costs

analysis of total costs

Novak - Rafa Tennis Company produces tennis balls sequentially in two processes in two departments. At the beginning of a period, Department 2 had 3000 units, which were 50 percent complete to conversion cost. During the period, 15 000 units were completed and transferred from Department 1 to Department 2. At the end of the period, Department 2 had 4000 units, which were 20 per cent complete to conversion costs. How many units were completed and transferred from Department 2 during the period?

Select one:

12 500

14 000

15 700

11 000

Lucky Klopp company starts work on 1000 physical units (Jurgens) and completes 75 per cent of conversion activity. The costs are $1500 for conversion and $5000 for direct material. What is the cost per equivalent unit for conversion?

Select one:

$1.00 per unit

$2.50 per unit

$1.50 per unit

$2.00 per unit

Rex Company Ltd had 4,000 units in work in process at 1 April. During April, 11,000 units were completed. At 30 April, 5,000 units remained in work in process. How many units were started during April?

Select one:

11,000

12,000

16,000

5,000

Spurs FC makes a product called 'slim chance'. Direct materials are added at the beginning of the process and conversion activity occurs uniformly throughout the process.

For May, opening WIP is 1,000 units (50% complete), 6,000 units are started and 6,300 units are completed and transferred out. Closing WIP is 70% complete.

Using the weighted average method of process costing, calculate the equivalent units of direct materials and conversion costs for the month of May.

Select one:

DM 7 000; CC 6 790

DM 7 000; CC 6 470

DM 6 050; CC 6 000

DM 6 800; CC 6 700

A joint product with very little value relative to other joint products is termed a:

Select one:

accounted loss.

negligible product.

by-product.

scrap.

The support department cost allocation method that recognises some of the reciprocal services between support departments is called the:

Select one:

joint cost method.

step-down method.

reciprocal method.

dual cost allocation method.

The 'direct method' of allocating support department costs ignores the fact that:

Select one:

All of the given answers

some support departments provide services to other support departments.

each department's cost is allocated only for the service consumed by it.

costs need to be fully allocated to operating departments.

Clear my choice

Borano Manufacturing Company Ltd has two production departments (Assembly and Finishing) and two support departments (Janitorial and Personnel). The usage of the two support departments is as follows:

User of SupportPersonnelJanitorial

Personnel5%

Janitorial10%

Assembly60%40%

Finishing30%55%

The budgeted costs in the support departments were as follows:

Personnel$ 90 000

Janitorial$ 50 000

Using the direct method, what is the Personnel Department cost allocated to the Assembly Department?

Select one:

$60 000

$22 500

$78 842

$54 000

Southampton FC retail Ltd sells 2 products 'Ralphs' and 'Hasselhoffs'. The firm has a Cleaning Department and a Human Resources (HR) Department that provide services to two Sales Departments. The Cleaning Department cost is allocated based on space and the HR Department cost is allocated based on employees. The following information is available.

HR Dept

CleaningDept

Sales #1

Sales #2

No. of Employees

5

10

15

45

Budget

$ 45 000

$ 30 000

Space (sq m)

4000

1000

20 000

30 000

Using the direct method, calculate the amount of service department cost (in total) allocated to Sales Department #2.

Select one:

$75 000

$51 750

$23 500

$30 000

Everton FC retail Ltd sells 2 products 'Bitters' and 'Haters'. The firm has a Cleaning Department and a Human Resources (HR) Department that provide services to two Sales Departments. The Cleaning Department cost is allocated based on space and the HR Department cost is allocated based on employees. The following information is available.

HR Dept

CleaningDept

Sales #1

Sales #2

No. of Employees

5

10

15

45

Budget

$ 45 000

$ 30 000

Space (sq m)

4000

1000

20 000

30 000

Using the direct method, calculate the amount of service department cost (in total) allocated to Sales Department #1.

Select one:

$23 250

$75 000

$50 000

$30 000

Which of the following statements is true?

Select one:

Activity-based costing cannot significantly improve product cost accuracy where there is significant product diversity.

Activity-based costing can significantly improve product cost accuracy where overhead costs are a large proportion of total costs.

Under traditional costing, product cost distortions will be highly significant if overhead costs are a small proportion of product cost.

In recent decades Direct Labour has increased as a proportion of total manufacturing costs in many manufacturing businesses.

The process of assigning the costs in a cost pool to the cost objects is called:

Select one:

cost allocation.

absorption costing.

segmented profit and loss statement.

variance.

Manufacturing overhead costs are also known as:

Select one:

operating expenses.

selling expenses.

indirect product costs.

direct costs.

Clear my choice

Roma FC Pty Ltd is a manufacturer of a range of football boots. The following is a list of activities, costs and quantities of activity drivers for a number of activities that occur in the factory.

Activity

Activity cost

Activity Driver

Quantity of Activity Driver

Cut leather

$ 7000

#batches

500 batches

Load machines

$ 9200

#batches

500 batches

Auto. boot manufacture

$36 000

#machine hours

4500 MH

Finalise & check

$24 000

#labour hours

2000 LH

Under an activity-based costing system, what is the overhead rate per unit of the activity driver for 'Cut leather'?

Select one:

$18.4

$22

$14

$52

Super F manufactures furniture. They have decided to develop an activity-based costing system. Shown below is each activity, its cost and the activity driver used to assign these costs to products.

Activity

Activity cost

Activity Driver

Quantity of Activity Driver

Process orders

$37 800

#orders

1500

Make patterns

$140 000

#items made

8000

Carving

$248 000

#hours taken

4000

Finishing

$186 200

#items made

7000

Under an activity-based costing system, what is the activity cost per unit of activity driver for processing orders?

Select one:

$62.00

$25.20

$25.40

$93.33

Sandy Ltd makes a profit of $20,000, calculated under variable costing.Sandy has a constant fixed manufacturing cost per unit of $50, opening inventory of 1,000 units and closing inventory of 1,100 units. What is the profit calculated using absorption costing?

Select one:

$20,000

$15,000

$25,000

$30,000

Scomo Ltd makes a profit of $100,000, calculated under absorption costing.Scomo has a constant fixed manufacturing cost per unit of $10, opening inventory of 10,000 units and closing inventory of 8,000 units. What is the profit calculated using variable costing?

Select one:

$80,000

$100,000

$160,000

$120,000

A standard that assumes a production process is as efficient as practical under normal operating conditions is:

Select one:

An average standard

A practical or attainable standard

A perfection standard

A low standard

Clear my choice

Given the following information, calculate the materials price variance:

Direct material purchased and used 30 000 kg

Cost of direct material$84 000

Unfavourable direct materials usage variance$3000

Standard quantity of direct materials for May production (SQ)29 000 kg

Select one:

$2800 (F)

$6000 (F)

$2800 (U)

$6000 (U)

Koko Company Ltd has set the following direct material standards per unit of product: 2.5 kg @ $3.00 per kg.

During April, actual direct material purchased is 8000 kg at a cost of $3.10 per kg. Direct materials used amounted to 7600 kg.

Actual production was 3000 units.

Determine Koko's direct material price variance.

Select one:

$300 U

$800 F

$300 F

$800 U

Dexter Company used a standard cost system to prepare the following budget at normal capacity for the month of May.

Machine hours 24 000

Fixed overhead $120 000

Actual data for May were as follows:

Machine hours worked 24 000

Fixed overhead $125 000

Standard machine hours allowed for actual output 25 000

Determine the fixed overhead volume variance.

Select one:

$1000 F

$5000 F

$5000 U

$0

The following information is available for Boris Johnson Manufacturing:

Budgeted Overheads for the month:

Machining Department$23,750; 500 machine hours in total

Assembling Department$16,900; 1000 direct labour hours in total

How much will job X 123 cost if it uses 13 machine hours and 20 direct labour hours, given that the direct material and direct labour costs are $299.50 combined for this job?

Select one:

$1,255

$363.90

$30,155

$40,950

Barcelona Ltd, a modern painting business, has received an inquiry from a potential customer for a painting. The pricing policy of the business is based on the budgeted financial data for the coming year. The data for the coming year is shown below:

Sales$550,000

Direct materials50,000

Direct labour300,000

Variable overhead5,000

Advertising for business5,000

Depreciation on equipment30,000

Other fixed overhead costs37,000

Profit before tax133,000

Other relevant information: Management has budgeted for 20,000 direct labour hours. Overhead is applied based on direct labour hours. An estimate for the direct costs of the job to be quoted on is shown below:

Direct materials$400

Direct labour (100hours)$1,500

The recommended quote for the job is:

Select one:

$2,195

$2,485

$2,285

$2,460

Everton FC Pty Ltd estimates its overhead costs for their Goodison Park factory will be $300,000 for the coming year and it will use 20,000 direct labour hours over the same period. How much overhead will be charged to a job that uses 25 direct labour hours?

Select one:

$375.

$15.

$120.

$23.