Chojnowski Incorporated makes a single product-a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted (Planned) Overhead: Budgeted variable manufacturing overhead$82,450 Budgeted fixed manufacturing overhead 325,975 Total budgeted manufacturing overhead$408,425 Budgeted production (a) 25,000units Standard hours per unit (b) 1.70labor-hours Budgeted hours (a) × (b) 42,500labor-hours Applying Overhead: Actual production (a) 20,000units Standard hours per unit (b) 1.70labor-hours Standard hours allowed for the actual
production (a) × (b) 34,000labor-hours Actual Overhead and Hours: Actual variable manufacturing overhead$74,812 Actual fixed manufacturing overhead 312,975 Total actual manufacturing overhead$387,787 Actual hours 31,700labor-hours ?The fixed component of the predetermined overhead rate is closest to:
A. $7.67 per labor-hour
B. $9.21 per labor-hour
C. $13.04 per labor-hour
D. $15.65 per labor-hour
Answer: A
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A manager assessing the organization's access to capital is involved in analysis of
A. strengths. B. weaknesses. C. opportunities. D. threats. E. strengths or weaknesses depending on the outcome of the assessment.
Under process costing, the unit cost of the completed units is less than the unit cost of the incomplete units.
1. In a process costing system, direct materials, direct labor, and manufacturing overhead are assigned to Work-in-Process Inventory for each process that uses them. 2. In a process costing system with multiple departments, one Work-in-Process Inventory account is maintained and the costs are transferred when a job is completed. 3. Under process costing, the unit cost of the completed units is less than the unit cost of the incomplete units. 4. At the end of an accounting period, the costs assigned to a production department can be split into the cost of units fully completed and transferred out, and the cost of units partially completed and remaining in the Work-in-Process Inventory of that department. 5. In a process costing system, a department's total production costs incurred in a particular period must equal the total costs transferred out of the department.
A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:
a. at the seller's business or residence in Chicago. b. as stated in all destination contracts. c. at the buyer's business or residence in Atlanta. d. irrelevant since the contract is void.
Arthur was looking for a Father's Day gift for his dad, Tony. Tony was a cigar smoker but Arthur was a nonsmoker. Arthur went to a cigar store and was looking around when the proprietor suggested Arthur try a new imported cigar. The proprietor touted
this new cigar as "just like the great Cuban cigars." Arthur was reluctant but did light one of the cigars, which had a pleasant aromatic smell and took about five to six minutes to be consumed. On this basis, Arthur bought a box of the cigars and presented them to his father as a gift. When the father smoked one of the cigars, it gave off an acrid smell and was completely consumed in less than two minutes. When Arthur saw this, he was very upset and asked his father to try another. The same situation was repeated with the acrid odor and the cigar burning down very quickly like a cigarette. After Arthur tried unsuccessfully to return the cigars for a refund, Arthur filed a small claims court action against the store. The case was based on the failure of the purchased cigars to conform to the sample, breach of the implied warranty of merchantability, and the misleading statement "just like the Cuban cigars." Discuss the probable outcome of the case.