Questions from Cost Accounting

Q: Kemp Manufacturing set 70,000 direct labor hours as the 2010

Kemp Manufacturing set 70,000 direct labor hours as the 2010 capacity measure for computing its predetermined variable overhead rate. At that level, budgeted variable overhead costs are $315,000. Kemp...

Q: Munich Ltd. uses a combined overhead rate of $2.

Munich Ltd. uses a combined overhead rate of $2.90 per machine hour to apply overhead to products. The rate was developed at an expected capacity of 264,000 machine hours; each unit of product require...

Q: Li Corporation’s flexible budget formula for total overhead is $360,

Li Corporation’s flexible budget formula for total overhead is $360,000 plus $8 per direct labor hour. The combined overhead rate is $20 per direct labor hour. The following data have been recorded fo...

Q: Bobcat Inc.’s total predetermined overhead rate is $50 per

Bobcat Inc.’s total predetermined overhead rate is $50 per hour based on a monthly capacity of 58,000 machine hours. Overhead is 30 percent variable and 70 percent fixed. During September 2010, Bobcat...

Q: At year-end 2010, the trial balance of Pennopscott Corp

At year-end 2010, the trial balance of Pennopscott Corp. showed the following accounts and amounts: Assume that, taken together, the variances are believed to be significant. Prepare the journal entri...

Q: McNeal Concrete makes precast concrete steps for use with manufactured housing.

McNeal Concrete makes precast concrete steps for use with manufactured housing. The company had the following 2010 budget based on expected production of 6,400 units: Actual production for 2010 was 7,...

Q: Many companies face the prospect of paying workers overtime wages; some

Many companies face the prospect of paying workers overtime wages; some of these payments are at time-and-a-half wages. a. How does overtime pay affect direct labor cost? Variable overhead? b. Obvious...

Q: An HMO medical program began reimbursing hospitals according to diagnostic-related

An HMO medical program began reimbursing hospitals according to diagnostic-related groups (DRGs). Each DRG has a specified standard “length of stay.” If a patient leaves the hospital early, the hospit...

Q: Auto Brakes Inc. manufactures brake rotors and has always applied overhead

Auto Brakes Inc. manufactures brake rotors and has always applied overhead to production using direct labor hours. Recently, company facilities were automated, and the accounting system was revised to...

Q: Bird’s Eye View manufactures satellite dishes used in residential and commercial installations

Bird’s Eye View manufactures satellite dishes used in residential and commercial installations for satellite-broadcasted television. For each unit, the following costs apply: $50 for...