ACCOUNTING

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. $11,100

b. $12,000

c. $16,600

d. $18,000

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. $92,550

c. $41,400

d. $51,150

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 h

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

a. $21.50

b. $23.00

c. $14.00

d. $26.00

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. 540

b. 1,620

c. 5,400

d. 1,200

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

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: $48000

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. $48,000

c. $54,000

d. $102,600

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. $83,600

b. $76,000

c. $87,200

d. $91200

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. $235,200

d. $242,800

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

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. $134,000

b. $138,800

c. $126,000

d. $12,800

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