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Practice Exam
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1
Hoyt Company has the following estimated costs for next year:

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Hoyt estimates that 20,000 direct labor and 32,000 machine hours will be worked during the year. If overhead is applied on the basis of machine hours, the predetermined overhead rate per hour will be:
A)$3.50.
B)$6.94.
C)$7.63.
D)$8.56.
2
Penn Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $100,000 and direct labor hours would be 10,000. The actual figures for the year were $110,000 for manufacturing overhead and 10,500 direct labor hours. The cost records for the year will show:
A)overapplied overhead of $10,000.
B)underapplied overhead of $10,000.
C)underapplied overhead of $5,000.
D)overapplied overhead of $5,000.
3
Serit Company's predetermined overhead rate is based on direct labor hours. At the beginning of the current year, the company estimated that its manufacturing overhead would total $220,000 during the year. During the year, the company incurred $200,000 in actual manufacturing overhead costs. The Manufacturing Overhead account showed that overhead was underapplied by $8,000 during the year. If the predetermined overhead rate was $20.00 per direct labor hour, how many hours were worked during the year?
A)9,600 hours
B)10,000 hours
C)10,400 hours
D)11,000 hours
4
Under Eastern Company's job-order costing system, manufacturing overhead is applied to Work in Process inventory using a predetermined overhead rate. During May, Eastern’s transactions included the following:

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Eastern Company had no beginning or ending inventories in May. What was the cost of goods manufactured for May?
A)$604,000
B)$620,000
C)$644,000
D)$660,000





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