Cha3

Chapter 3 Homework Questions

Post your answers in Canvas

1. Which of the following 2 situations are best suited for job order costing?

A) An oil refinery

B) Beverage bottling plant

C) Dentist’s office

D) Paper plant

E) Mechanic’s shop

2. Logan Products computes it predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it estimated that 30,000 direct labor hour (DLH) would be required for the period’s estimated level of production. The company also estimated $450,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $9.50 per DLH. Logan’s actual manufacturing overhead for the year was $732,500 and its actual total labor was 29,300 hours.

$_____________ Compute the company's predetermined overhead rate (PDOR) for the year.

Use the following to answer questions 3 - 7

Westan Corp uses a predetermined overhead rate of $18.00 per direct labor hour (DLH). This predetermined rate was based on a cost formula that estimated $504,000 of total manufacturing overhead for an estimated activity level of 28,000 DLH. The company incurred actual total manufacturing overhead costs of $515,000 and 27,900 total DLH during the period.

3. $_____________Determine the amount of MOH that would have been applied to units of product during the period.

4. ___________ When manufacturing overhead (MOH) is applied into production, which account is increased?

5. $_____________Assume Westan worked on a job that took 50 DLH (direct labor hours) to complete. How much MOH would have been applied to the job?

6. During the period, was Westan’s MOH underapplied or overapplied?

7. $_____________How much was MOH underapplied or overapplied? DOLLAR AMOUNT ONLY

Use the following to answer questions 8 – 9

Weaver Company’s predetermined overhead rate is $12.00 per DLH and its Direct Labor wage rate is $18.00 per hour. The...