Week_2_quiz - 1 Question(TCO 2 Bubbas Crawfish Processing...

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Question : (TCO 2) Bubba’s Crawfish Processing Company uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $2,250,000 and direct labor hours are budgeted at 415,000 hours. Actual overhead was $2,200,000 and actual direct labor hours worked were 422,000. (a) Calculate the predetermined overhead rate. (b) Calculate the overhead applied. (c) Determine the amount of overhead that is over/underapplied. Student Answer: a.) the predetermined overhead rate would be: $2,250,000/$415,000= $5.42 b.) the overhead applied would be: $5.42*$422,000=$2,287,240 c.) This would show me that the estimated amounts were underapplied. Instructor Explanation: (a) $2,250,000 / 415,000 hours = $5.42 per direct labor hour (DLH) (b) $5.42 DLH * 422,000 hours = $2,287,240 (c) Overapplied $87,240 ($2,287,240 - $2,200,000) 2. Question : (TCO 2) Thibodeaux Limousine Corporation is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $776,000. Budgeted machine hours are 105,000 hours, and budgeted labor hours are 17,500 hours at a rate of $10.00 per hour. Compute the predetermined overhead rate based on: (a) Direct labor dollars (b) Direct labor hours (c) Machine hours Student Answer: a.) the predetermined overhead rate for Direct Labor Dollars would be: $4.43 by first multiplying the budgeted labor hours by the rate then dividing the budgeted overhead by that budgeted labor hours in dollars. b.)the predetermined overhead rate based on the Direct Labor Hours would be: 776,000/17,500=44.34 c.) the predetermined overhead rate based on the Machine hours would be: 776,000/105,000=7.39 Instructor Explanation: (a) $776,000 / (17,500 * $10.00) = 443% (b) $776,000 / 17,500 = $44.34 DLH (c) $776,000 / 105,000 = $7.39 per machine hour 3. Question : (TCO 1) List and briefly describe four of the five differences between managerial accounting and financial accounting. Student Answer: The main differences between managerial accounting and financial accounting are: Managerial account is allowed to not use the GAAP whereas, financial account has to use the GAAP. Managerial account usually has more details included, it also usually bases a lot on the future using estimates and predetermined amounts. And lastly but most important I would say managerial account is more for the office and financial accounting is for investors. Instructor Explanation:
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Week_2_quiz - 1 Question(TCO 2 Bubbas Crawfish Processing...

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