Q5

Exhibit 18-4

1. Playtime Toys began operations on January 1, 2011. During January it produced 2,000 toys and sold 1,850 toys. The following are needed to make 1 toy:

Wood 2 board feet at $3 per foot

Paint 1.5 quarts at $2 per quart

Direct labor 3 hours at $6 per hour

Manufacturing overhead is applied at a rate of $4 per direct labor hour.

Refer to Exhibit 18-4. Given the information above, the cost of direct materials used in January would be:

A) $12,000

B) $18,000

C) $16,600

D) $11,100

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2. Cachet Inc. had a $93,000 balance in Accounts Receivable on July 1. In July, it expects to collect 55% of these receivables and 30% of the July credit sales, which are budgeted at $138,000. What is the budgeted accounts receivable at the end of July?

A) $138,450

B) $41,400

C) $92,550

D) $51,150

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3. The following resources are required to make 1 batch of ice cream:

Milk 5 gallons at $2.50 per gallon

Sugar 5 pounds at $0.30 per pound

Direct labor 45 minutes at $12.00 per hour

Manufacturing overhead 30 minutes at $6.00 per hour

Given this information, what is the cost of making 1 batch of ice cream?

A) $23.00

B) $21.50

C) $14.00

D) $26.00

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4. Theodore's Musical Toys makes xylophones. Each xylophone takes 3 labor hours to make at a rate of $10.00 per hour. What is the budgeted production of xylophones if the budgeted direct labor cost for July is $16,200?

A) 1,620

B) 1,200

C) 540

D) 5,400

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5. A department has a budgeted monthly manufacturing overhead cost of $160,000 plus $16 per direct labor hour. If a flexible budget reflects $388,000 for total manufacturing overhead cost for the month, the actual direct labor hours would be:

A) 24,250

B) 13,000

C) 12,250

D) 14,250

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6. Exhibit 18-6

The July manufacturing overhead budget of Kyoto Corporation, shown below, was constructed assuming an activity level of 48,000 direct labor hours

Variable costs:

Indirect labor $48,000

Indirect materials 24,000

Factory supplies 19,200 $ 91,200

Fixed costs:

Depreciation $38,400

Supervision 69,600

Property taxes 36,000 144,000

Total overhead costs $235,200

Refer to Exhibit 18-6. If management prepared a flexible budget for July using 54,000 direct labor hours, what amount would this flexible budget show for indirect labor?

A) $27,000

B) $102,600

C) $54,000

D) $48,000

7. Refer to Exhibit 18-6. If management prepared a flexible budget for July using 40,000 direct labor hours, what amount would this flexible budget show for total variable costs?

A) $76,000

B) $83,600

C) $91,200

D) $87,200

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8. Refer to Exhibit 18-6. If management prepared a flexible budget for July using 52,000 direct labor hours, what amount would this flexible budget show for total overhead costs?

A) $239,200

B) $254,800

C) $242,800

D) $235,200

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9. Exhibit 18-7

Cedar Corporation uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows:

Indirect labor $12.00

Indirect materials 6.00

Maintenance 2.00

Utilities 1.00

Fixed overhead costs per month are:

Supervision $8,000

Insurance 1,600

Factory rent 1,300

Depreciation 1,900

Refer to Exhibit 18-7. If Cedar prepares a flexible budget for 4,000 direct labor hours, what amount will this budget show for variable manufacturing overhead costs?

A) $109,600

B) $42,000

C) $8,400

D) $84,000

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10. Refer to Exhibit 18-7. If Cedar prepares a flexible budget for 6,000 direct labor hours, what amount will this budget show for total manufacturing overhead costs?

A) $126,000

B) $134,000

C) $138,800

D) $12,800