Section A (20 marks) Answer ALL questions in this section. Each question carries 2 marks. 1 2 The manufacturing overhead budget at Formica Corporation is based on budgeted direct labour-hours. The direct labour budget indicates that 4.400 direct labour-hours will be required in October. The variable overhead rate is $8.90 per direct labour- hour. The company's budgeted fixed manufacturing overhead is $86,680 per month, which includes depreciation of $16,280. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The pre-determined overhead rate for October should be: (a) $19.70 (b) $24.90 (c) $28.60 (d) None of the above. Bakken Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. Production volume 4,000 units 5,000 units Direct materials $45,50 per unit $45.50 per unit Direct labour $44.90 per unit $44.90 per unit Manufacturing overhead $131.50 per unit $108.50 per unit The best estimate of the total variable manufacturing cost per unit is: (a) $45.50 (b) $90.40 (c) $106.9 (d) None of the above. Reddy Company has the following cost formulas for overhead: 3 Cost Indirect materials Maintenance Machine setup Utilities Depreciation Cost Formula $2,000 plus $0.40 per machine hour $1,500 plus $0.60 per machine hour $0.30 per machine hour $200 plus $0.10 per machine hour $800 Based on the cost formulas, the total overhead cost at 600 machine hours is expected to be: (a) (b) (c) (d) $4,500 $52,60 $5,340 None of the above