In Class Review Exam 2 202

In Class Review Exam 2 202 - The following information...

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The following information pertains to March. Cost Pool 1: Company Q estimates overhead for their unit-level costs using an activity rate from an expected level of Direct Labor Hours. Direct Labor Hours were expected to be 3,000 with an estimated total cost of $60,000. Cost Pool 2: Company Q estimates costs for Cost Pool 2 using the cost driver Direct Materials Handled. For every pound of Direct Materials used the company expects to incur $2 in manufacturing overhead costs for Cost Pool 2. Cost Pool 3: Company Q factors all anticipated seasonal costs into one cost pool with a corresponding monthly cost estimate which needs to be adjusted for inflation. March’s previous year estimate was $30,000. The inflation rate is estimated to be 4%. Cost Pool 4: Company Q bases overhead costs from Cost Pool 4 using the following equation: Total Cost = 0.05 Machine Hours + $70,000 Inventory Account Beginning Balance Ending Balance Raw Materials* $12,000 $10,000 Work In Process $6,000 $7,000 Finished Goods Inventory $38,000 $22,000 All Raw Materials cost $20 per pound. Company Q transferred $200,000 in Raw Materials for use in production. ($600 of these Materials were used as Indirect Materials). Company Q billed $58,000 in Direct Labor Cost (for 2,980 hours) and $55,000 in Indirect Labor Cost (of which $35,000 were Salaries).
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