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examchap2 - Folk Exam Questions - Chapter 2 1. Simmons...

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Folk Exam Questions - Chapter 2 1. Simmons Company has the following estimated costs for next year: Direct materials $ 60,000 Direct labor 220,000 Sales commissions 300,000 Salary of production supervisor 140,000 Indirect materials 20,000 Advertising expense 44,000 Rent on factory equipment 64,000 Simmons estimates that 40,000 direct labor and 64,000 machine hours will be worked during the year. If overhead is applied on the basis of machine hours, what will be the overhead rate per hour? Solution: Salary of production supervisor $140,000 Indirect materials 20,000 Rent on factory equipment 64,000 Estimated manufacturing overhead costs 224,000 Estimated machine hours ÷ 64,000 Predetermined overhead rate $3.50 per MH 2. Houghton Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $200,000 and direct labor hours would be 20,000. The actual figures for the year were $220,000 for manufacturing overhead and
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This note was uploaded on 04/06/2012 for the course 10 275 taught by Professor Sahay during the Summer '11 term at Rutgers.

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examchap2 - Folk Exam Questions - Chapter 2 1. Simmons...

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