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GNB13eCh03Exam - Garrison 13e Practice Exam Chapter 3 Print...

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Garrison 13e Practice Exam – Chapter 3 Print these pages. Answer each of the following questions, explaining your answers or showing your work, as appropriate, and then compare your solutions to those provided at the end of the practice exam. 1. Closet Depot, Inc. had the following estimated costs for next year: Sales commissions $600,000 Direct labor 440,000 Salary of production supervisor 280,000 Rent on factory equipment 128,000 Direct materials 120,000 Advertising expense 88,000 Indirect materials 40,000 The company estimates that 64,000 direct labor hours will be worked and 80,000 machine hours will be incurred during the year. If overhead is applied on the basis of direct labor hours, what will be the overhead rate per hour? 2. Energetica 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 $440,000 during the year. During the year, the company incurred $400,000 in actual manufacturing overhead costs. The Manufacturing Overhead account showed that overhead was underapplied by $16,000 during the year. If the predetermined overhead rate was $40.00 per direct labor hour, how many hours were worked during the year?
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