# Chapter 003, Systems Design: Job-Order Costing

| October 3, 2018

36. Freeman Company uses a predetermined overhead rate based on direct
labor-hours to apply manufacturing overhead to jobs. At the beginning of the
year, the company estimated manufacturing overhead would be \$150,000 and direct
labor-hours would be 10,000. The actual figures for the year were \$186,000 for
manufacturing overhead and 12,000 direct labor-hours. The cost records for the
year will show:

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Chapter 003, Systems Design: Job-Order Costing

38. Harrell Company uses a predetermined overhead rate based on direct
labor-hours to apply manufacturing overhead to jobs. At the beginning of the
year the company estimated its total manufacturing overhead cost at \$400,000
and its direct labor-hours at 100,000 hours. The actual overhead cost incurred
during the year was \$350,000 and the actual direct labor-hours incurred on jobs
during the year was 90,000 hours. The manufacturing overhead for the year would
be:

A. \$10,000 underapplied B. \$10,000 overapplied C. \$50,000
underapplied D. \$50,000 overapplied

39. For the current year, Paxman Company incurred \$150,000 in actual
overhead was overapplied in the amount of \$6,000 for the year. If the
predetermined overhead rate was \$8.00 per direct labor-hour, how many hours
were worked during the year?

A. 19,500 hours B. 18,000 hours C. 18,750 hours D. 17,750 hours

40. At the beginning of the year, manufacturing overhead for the year
was estimated to be

\$702,450. At the end of the year, actual direct labor-hours for
the year were 33,100 hours, the actual manufacturing overhead for the year was
\$697,450, and manufacturing overhead for the year was overapplied by \$40,680.
If the predetermined overhead rate is based on direct labor-hours, then the
estimated direct labor-hours at the beginning of the year used in the predetermined

A. 31,500 direct labor-hours

B. 29,452 direct labor-hours

C. 31,276 direct labor-hours

D. 33,100 direct labor-hours

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Chapter 003, Systems Design: Job-Order Costing

41. Brabo Corporation uses direct labor-hours in its predetermined
overhead rate. At the beginning of the year, the estimated direct labor-hours
were 15,700 hours. At the end of the year, actual direct labor-hours for the
year were 16,700 hours, the actual manufacturing overhead for the year was \$352,960,
and manufacturing overhead for the year was overapplied by \$27,800. The
estimated manufacturing overhead at the beginning of the year used in the
predetermined overhead rate must have been:

A. \$327,124 B. \$357,960 C. \$380,760 D. \$347,960

42. Crimp Corporation uses direct labor-hours in its predetermined
overhead rate. At the beginning of the year, the estimated direct labor-hours
were 15,000 hours and the total estimated manufacturing overhead was \$258,000.
At the end of the year, actual direct labor-hours for the year were 13,100
hours and the actual manufacturing overhead for the year was \$253,000. Overhead
at the end of the year was:

A. \$27,680 overapplied B. \$32,680 overapplied C. \$27,680
underapplied D. \$32,680 underapplied

43. Dagnon Corporation uses direct labor-hours in its predetermined
overhead rate. At the beginning of the year, the total estimated manufacturing
overhead was \$299,130. At the end of the year, actual direct labor-hours for
the year were 17,400 hours, manufacturing overhead for the year was overapplied
by \$13,850, and the actual manufacturing overhead was \$294,130. The
predetermined overhead rate for the year must have been closest to:
A. \$17.70 B. \$17.19 C.
\$18.22 D. \$16.90

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Chapter 003, Systems Design: Job-Order Costing

44. The Watts Company uses predetermined overhead rates to apply
labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the
year, the company made the following estimates:

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What predetermined overhead rates would be used in Dept A and Dept
B, respectively?

A. 50% and \$8.00
B. 50% and \$5.00

C. \$15 and 110%

D. 200% and \$5.00

45. Simplex Company has the following estimated costs for next
year:

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Simplex estimates that
10,000 direct labor and 16,000 machine-hours will be worked during the year. If
overhead is applied on the basis of machine-hours, the overhead rate per hour
will be:

A. \$8.56

B. \$7.63

C. \$6.94

D. \$3.50

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Chapter 003, Systems Design: Job-Order Costing

46. The balance in White Company’s Work in Process inventory account
was \$15,000 on August 1 and \$18,000 on August 31. The company incurred \$30,000
in direct labor cost during August and requisitioned \$25,000 in raw materials
(all direct material). If the sum of the debits to the Manufacturing Overhead
account total \$28,000 for the month, and if the sum of the credits totaled
\$30,000, then:

A. Finished Goods was debited for \$82,000 during the month. B.
Finished Goods was credited for \$83,000 during the month.