Accounting

1.Washtenaw Corporation uses a job-order costing system. The following data are for last year:

 

Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What predetermined overhead rate was used last year?

$3.36 per direct labor-hour

$3.25 per direct labor-hour

$3.55 per direct labor-hour

$3.08 per direct labor-hour

12. Wert Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. Last year, the company’s estimated manufacturing overhead was $1,200,000 and its estimated level of activity was 50,000 direct labor-hours. The company’s direct labor wage rate is $12 per hour. Actual manufacturing overhead amounted to $1,240,000, with actual direct labor cost of $650,000. For the year, manufacturing overhead was:

overapplied by $60,000

overapplied by $40,000

underapplied by $60,000

underapplied by $44,000

13. A company has provided the following data:

 

If the sales volume decreases by 25%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will:

decrease by $3,125.

decrease by $15,000.

increase by $20,625.

decrease by $31,875.

14.Slonaker Inc. has provided the following data concerning its maintenance costs:

Machine-Hours Maintenance
Cost
April 5,820           $30,400
May 5,803           $30,310
June 5,785           $30,258
July 5,782           $30,254
August 5,738           $30,099
September 5,816           $30,381
October 5,851           $30,430
November 5,822           $30,399
December 5,806           $30,339
________________________________________

Management believes that maintenance cost is a mixed cost that depends on machine-hours.

Required:
Estimate the variable cost per machine-hour and the fixed cost per month using the high-low method.(Round your “Variable cost” to 2 decimal places. Omit the “$” sign in your response.)

Variable cost per machine-hour $

Fixed cost per month $

Solution:

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