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| 1 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
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| 7500 | 3200 | Machine hours |
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| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the direct method of support department allocation was used, the amount of Support Department X’s costs allocated to Production Department Z is: |
| | A) | $10 000 |
| | B) | $10 800 |
| | C) | $15 000 |
| | D) | $15 800 |
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| 2 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the direct method is used to allocate the support department overhead costs, the support department overhead costs allocated to Production Department Y would be: |
| | A) | $19 200 |
| | B) | $15 800 |
| | C) | $18 750 |
| | D) | $16 250 |
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| 3 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the direct method is used to allocate the support department overhead costs, the overhead application rate for Production Department Z would be: |
| | A) | $6.50 per machine hour |
| | B) | $2.50 per direct labour hour |
| | C) | $8.50 per direct labour hour |
| | D) | $30.50 per machine hour |
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| 4 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the direct method is used to allocate the support department overhead costs, the total manufacturing cost of Product A would be: |
| | A) | $173.50 |
| | B) | $108.08 |
| | C) | $173.08 |
| | D) | $151.50 |
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| 5 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the step-down method of support department allocation was used, and Support Department W was allocated first, the amount of Support Department W’s costs allocated to Production Department Y are: |
| | A) | $3750 |
| | B) | $6250 |
| | C) | $3000 |
| | D) | $5000 |
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| 6 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the step-down method of support department allocation was used, and Support Department W was allocated first, the amount of Support Department W’s costs allocated to Production Department Z is: |
| | A) | $6 250 |
| | B) | $3 000 |
| | C) | $5 000 |
| | D) | $2 000 |
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| 7 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the step-down method of support department allocation was used, and Support Department W was allocated first, the amount of Support Department X’s costs allocated to Production Department Y is: |
| | A) | $10 800 |
| | B) | $15 000 |
| | C) | $15 800 |
| | D) | $16 200 |
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| 8 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the direct method of support department allocation was used, and Support Department W is allocated first, the amount of Support Department X’s costs allocated to Production Department Z is: |
| | A) | $10 800 |
| | B) | $15 000 |
| | C) | $15 800 |
| | D) | $16 200 |
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| 9 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the step-down method is used to allocate the support department overhead costs, and Support Department W is allocated first, the support department overhead costs allocated to Production Department Y would be: |
| | A) | $19 200 |
| | B) | $15 800 |
| | C) | $18 750 |
| | D) | $16 250 |
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| 10 | |
Rose Manufacturing Company operates two support departments and two production departments. Budgeted costs and normal activity levels are as follows:
| Support Department | Production Department |
| W | X | Y | Z | Overhead costs | $10000 | $25000 | $45000 | $60000 | Square metres | 1000 | 2000 | 3000 | 5000 | Number of employees | 10 | 12 | 30 | 20 | Direct labour hours |
|
| 7500 | 3200 | Machine hours |
|
| 3000 | 2500 |
Support Department W’s overhead costs are allocated based on square metres and Support Department X’s overhead costs are allocated on the basis of number of employees. Production Department Y uses direct labour hours to assign overhead costs to products and Production Department Z uses machine hours. One of the products the company manufactures, Product A, requires two direct labour hours in Department Y and three machine hours in Department Z. Direct materials for the product cost $45 per unit and direct labour is $20 per unit. If the step-down method is used to allocate the support department overhead costs, and Support Department W is allocated first, the overhead application rate for Production Department Z would be: |
| | A) | $2.50 per direct labour hour |
| | B) | $8.50 per direct labour hour |
| | C) | $30.50 per machine hour |
| | D) | $30.32 per machine hour |
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