Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000Total fixed manufacturing overhead cost$312,000Variable manufacturing overhead per machine-hour$2.10 Recently, Job T629 was completed with the following characteristics: Number of units in the job 50Total machine-hours 200 The estimated total manufacturing overhead is closest to:
A. $480,000
B. $312,000
C. $168,000
D. $312,002
Answer: A
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A cost that has characteristics of both a variable cost and a fixed cost is called a:
A) variable/fixed cost B) mixed cost C) discretionary cost D) sunk cost
When a company receives an interest-bearing note receivable, it will
A) debit Notes Receivable for the maturity value of the note. B) debit Notes Receivable for the face value of the note. C) credit Notes Receivable for the maturity value of the note. D) credit Notes Receivable for the face value of the note.
Which of the following is NOT a disadvantage of decentralized operation?
A) Competition among managers decreases profits B) Duplication of operations C) Price cutting by departments that are competing in the same product market D) Top management freed from everyday tasks to do strategic planning
Omar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Regular Super TotalUnits 10,000 3,700 13,700 Sales revenue$240,000 $740,000 $980,000 Less: Cost of goods sold 180,000 481,000 661,000 Gross Margin$60,000 $259,000 $319,000 Less: Selling expenses 60,000 134,000 194,000 Operating income (loss)$0 $125,000 $125,000 Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.Omar Industries wants to drop the Regular product line. If the line is dropped, company-wide fixed manufacturing costs would fall by
10% because there is no alternative use of the facilities. What would be the impact on operating income if Regular is discontinued? A. $10,400 increase. B. $20,000 increase. C. $39,600 decrease. D. $0. E. None of the answers is correct.