Exam 13: Job-Costing

The following information was gathered for Gophers Company: Budgeted direct-labor hours 8,000 Actual dir ect-lab or hours 8,100 Bud geted factory overhead \ 224,000 Actual factory overhead \ 224,970 Assume the cost driver is direct- labor hours. The amount of over/underapplied overhead is:

Buckeyes Company incurred actual overhead costs of $80,000 for the year. A budgeted factory- overhead rate of 210% of direct- labor cost was determined at the beginning of the year. Budgeted factory overhead was $78,750, and budgeted direct- labor cost was $37,500. Actual direct- labor cost was $40,000 for the year. The disposition of the variance, assuming a material amount, would include a:

The fixed overhead rate is computed as:

The absorption- costing method has fixed factory overhead appearing in only cost of goods sold.

Tabitha Company's overhead cost information is given below: Standard applied overhead \3 22,000 Budgeted overhead based on standard machinehours allowed \3 32,000 Budgeted overhead based on actual machinehours used \3 20,000 Actual overhead \3 36,000 Required: a. Compute the total overhead variance. b. Calculate the flexible- budget variance. c. Determine the production- volume variance.

Gross margin appears in a variable costing income statement.

Gary Company had the following balances as of December 31, 20X5: Cost of goods sold \ 250,000 Direct-materials inventory 50,000 WIP inventory 170,000 Finished goods inventory 80,000 Factory dep artment overhead control 25,000 Credit Required: a. Does the variance represent overapplied or underapplied overhead? b. Prepare the entry to dispose of the variance using the proration method. c. What effect, if any, did the entry in part b. have on gross profit?

When the variable costing method is used, fixed factory overhead appears on the income statement as a:

Bruins Company had the following information: Budgeted factory overhead \ 75,000 Actual factory overhead \ 80,000 Budgeted: Direct-1abor hours 20,000 Actual: Direct-labor hours 21,000 The budgeted factory- overhead rate using direct- labor hours as the cost driver is:

When sales exceed production, variable- costing income is greater than absorption- costing income.

The variable- costing method regards fixed manufacturing costs as expenses in the period they are incurred.

A company has the following information for its first month of operations: Raw materials used \ 37,500 Sales ( \ 97.50 per unit) \ 117,000 Direct labor \ 63,000 Variable factory overhead \ 25,500 Fixed factory overhead unknown Variable selling and administrative \4 ,500 Fixed selling and administrative \7 ,500 Gross profit \4 5,000 Contribution margin unknown The company sold half of the 2,400 units it produced. of factory overhead is included in the ending inventory under absorption costing.

Hawkeyes Company had the following information: Budgeted variable factory overhead \6 6,000 Budgeted fixed factory overhead \4 6,500 Actual variable factory overhead \6 7,500 Actual fixed factory overhead \5 2,500 Budgeted cost driver activity levels: Direct- labor hours 30,000 Direct- labor costs \ 150,000 Machine hours 60,000 Productionsetups 15,000 Actual cost driver activity levels: Direct- labor hours 31,500 Direct-labor costs \ 165,600 Machine hours 56,190 Productionsetups 14,280 The budgeted factory- overhead rate using production setups as the cost driver is:

assigns both fixed and variable manufacturing costs to the product.

Hoosier Company incurred actual overhead costs of $305,000 for the year. A budgeted factory- overhead rate of 150% of direct- labor cost was determined at the beginning of the year. Budgeted factory overhead was $300,000, and budgeted direct- labor cost was $200,000. Actual direct- labor cost was $205,000 for the year. The disposition of the variance (assuming a material amount) would include a:

The following information was compiled by Baker Company: Exp ected volume of production 50,000 units Actual level of production 47,500 units Budgeted fixed overhead \ 400,000 Actual fixed overhead \ 415,000 Variable overhead rate p er direct- lab or \ 18 hour Actual variable overhead \7 90,000 Standard direct- lab or hours allowed per unit produc ed 1.0 hour Standard direct- lab or rate per hour \ 32.00 Actual direct- lab or hours of input 46,500 hours Actual direct- lab or rate per hour \ 33.00 Compute the following variances: a. Variable factory overhead flexible- budget variance b. Fixed factory overhead flexible- budget variance c. Fixed factory overhead production- volume variance

Variable costing regards fixed manufacturing overhead as:

In the immediate write- off approach, underapplied overhead is regarded as:

Provide reasons for differences between the amounts of incurred and applied overhead.

Roosevelt Company reported the following information about the production and sales of its only product during its first month of operations: Sales (\ 225 per unit) \ 360,000 Direct materials used \ 176,000 Direct labor \ 100,000 Variable factory overhead \ 44,000 Fixed factory overhead \ 80,000 Variable s elling and administrative \ 20,000 expenses Fixed selling and adminis trative expenses \1 0,000 Ending inventories: Direct materials -0- WIP -0- Finished goods units The operating income (loss) under absorption costing is: