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ACCT 505 Final Exam New 2016

ACCT 505 Final Exam New 2016

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Author: Abraham Nolito
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1. Sandler Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below.
Estimated machine hours 73,000
Estimated variable manufacturing overhead $3.49 per machine hour
Estimated total fixed manufacturing overhead $838,770
Compute the company's predetermined overhead rate
2. (TCO D) Lindon Company uses 5,000 units of Part X each year as a component in the assembly of one of its products.
The company is presently producing Part X internally at a total cost of $80,000 as follows.
Direct materials...............................................$18,000
Direct labor......................................................20,000
Variable manufacturing overhead................... 12,000
Fixed manufacturing overhead....................... 30,000
Total costs.......................................................80,000
An outside supplier has offered to provide Part X at a price of $13 per unit. If Lindon stops producing the part internally, one third of the manufacturing overhead would be eliminated
3.
(TCO C) The following overhead data are for a department of a large company.

Actual costs Static

Actual

Flexible

Varaince

Incurred budget

Incurred

Budget

Activity level (in units) 800 750

800

800

Variable costs:

Indirect materials $6,850 $6,600

6850

7040

190

Electricity $1,312 $1,275

1312

1360

48

Fixed costs:

Administration $3,570 $3,700

3570

3700

130

Rent $3,320 $3,200

3320

3200

-120

Total

15052

15300

248

Variable cost per unit

4. (TCO C) The selling and administrative expense budget of Fenley Corporation is based on the number of units sold, which are budgeted to be 2,500 units in January. The variable selling and administrative expense is $4.40 per unit. The budgeted fixed selling and administrative expense is $35,750 per month, which includes depreciation of $4,000. The remainder of the fixed selling and administrative expense represents current cash flows.

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