Deck 4: Job Costing

Question 1

Cost pools are defined as groupings of individual cost items which can range from broad,company-wide categories to very narrow categories.

Answer 1

True

Question 2

Which of the following is NOT possible to use as a cost allocation base for manufacturing overhead?

A)direct labour dollars
B)direct labour hours
C)direct material dollars
D)direct labour hours or dollars
E)indirect labour hours

Answer 2

E

Question 3

In general terms the process of assigning costs to a particular product or service is called

A)a cost allocation system.
B)a cost assignment system.
C)a job costing system.
D)a process costing system.
E)a cost recording system.

Answer 3

B

Question 4

Raw materials that can be traced to a cost object are an example of an indirect cost.

Question 5

Cost pools are often organized in conjunction with

A)direct labour pools.
B)the general ledger control accounts.
C)variable and fixed costs.
D)direct cost tracing techniques.
E)cost-allocation bases.

Question 6

Cost assignment includes cost allocation for indirect costs and direct costs.

Question 7

The cost driver of an indirect cost is often used as the cost allocation base.

Question 8

In a costing system

A)cost tracing allocates indirect costs.
B)cost allocation assigns direct costs.
C)there may never be more than one indirect cost pool.
D)a cost object should be a product and not a department or a geographic territory.
E)a cost allocation base can be either financial or nonfinancial.

Question 9

Transferring costs from indirect cost pools to cost objects is called

A)cost allocation.
B)cost control.
C)cost pool.
D)cost factoring.
E)cost processing.

Question 10

Which of the following includes both traced direct costs and allocated indirect costs?

A)cost tracing
B)cost pools
C)assigned costs
D)cost allocation
E)cost recording

Question 11

Cost tracing is a specific term for assigning indirect costs.

Question 12

A grouping of individual cost items is called a

A)cost objective.
B)costing group.
C)cost department.
D)cost pool.
E)cost base.

Question 13

Fixed and variable costs may be allocated to a cost object.

Question 14

A cost allocation base is only financial in nature,and is usually the cost driver of the particular costs being measured.

Question 15

The objective of allocating indirect costs is to measure the underlying usage of indirect resources by jobs.

Question 16

Assigning direct costs to a cost object is called

A)cost allocation.
B)job costing.
C)cost pooling.
D)process costing.
E)cost tracing.

Question 17

For each cost pool,the indirect cost rate equals the indirect cost pool divided by the cost allocation base.

Question 18

Direct costs are allocated to the cost object using a cost-allocation method.

Question 19

A factor used to systematically link an indirect cost to a cost object is called

A)a cost allocation base.
B)a cost pool.
C)cost assignment.
D)a traceable cost.
E)a non-traceable cost.

Question 20

Which of the following would most likely be a direct cost in a manufacturing company?

A)supervision and engineering
B)utilities
C)repairs
D)utilities and repairs
E)raw materials

Question 21

Actual costing allocates indirect costs based on the predetermined indirect-cost rates multiplied by the actual quantities of the cost-allocation bases.

Question 22

Actual costing traces direct costs to a cost object by multiplying the budgeted direct cost rate and the actual quantity.

Question 23

Actual costing can also be a method of job costing.

Question 24

Provide examples of three companies that would likely use job costing,and three companies that would likely use process costing.

Question 25

Describe job-costing and process-costing systems.Explain when it would be appropriate to use each.

Question 26

A process costing system assigns costs to groups of similar units during a specified time period and then computes the average unit cost.

Question 27

At the end of the year,the direct costs traced to jobs using the budgeted rates will equal actual direct costs.

Question 28

The new manager of the insurance division does not understand how the company can have so many overhead rates for assigning costs to the activities of the company's life insurance underwriters.There is one rate schedule for average assignable costs when agents write standard policies.There is another rate schedule which the agents must complete when they write special policies,and these policies are costed out differently from those that are categorized as standard policies.
Required:
Why might the company have different costing systems with different overhead rates for the standard and specialized policies?

Question 29

In each period,job costing divides the total cost of producing an identical or similar product by the total number of units produced to obtain a per-unit cost.

Question 30

In a job cost system,the cost object is a unit or multiple units of a distinct product or service called a job.

Question 31

The difference between the actual costing and normal costing methods is that actual costing uses a budgeted indirect cost rate while normal costing uses an actual indirect cost rate.

Question 32

A job costing system assigns costs to a distinct unit or set of units of a product or service.

Question 33

In the five-step decision-making process which of the following is an element of the last step in the process?

A)evaluate performance
B)choose among alternatives
C)identify uncertainties
D)identify the problems
E)make predictions about the future

Question 34

Process costing is a useful system for tracking the costs of building a house.

Question 35

For normal costing,even though the budgeted indirect-cost rate is based on estimates,indirect costs are allocated to products based on actual levels of the cost-allocation base.

Question 36

Actual costing systems are commonly found in practice because the indirect cost information is readily available.

Question 37

Direct costs are traced the same way for actual costing and normal costing.

Question 38

Which of the following would be appropriately costed using a process costing system?

A)oil refining
B)a law firm managing individual legal cases
C)assembly of individual aircraft by Bombardier
D)movies produced by Lions Gate Entertainment
E)audit engagements performed by KPMG

Question 39

Larry's Appliance Shop operates retail stores that sell appliances.The cost objects are the individual sales of a given type of appliance and sales support.For refrigerators in July,the following costs were recorded:

Required:
a.Which of the costs will be subject to direct cost tracing?
b.What is the total cost for refrigerators?
c.What is the total cost of the Sales Support for refrigerators?

Question 40

Which of the following would be appropriately costed using a job costing system?

A)oil refining
B)bank clearing at TD Canada Trust
C)beverage production
D)replacing a homeowner's furnace
E)lumber dealing by Weyerhaeuser

Question 41

Which of the following is one of the steps used in assigning manufacturing overhead costs to individual jobs?

A)combine different cost objects into pools
B)assign direct costs to the cost object
C)identify the direct cost pools associated with the job
D)calculate the direct cost allocation rate for each direct cost pool
E)select the cost-allocation base to use in allocating indirect costs to the cost object

Question 42

A company employs 25 full-time staff.The company spent $75,000 in advertising in the year (this amount is a period cost with a constant amount spent each year).Budgeted indirect manufacturing costs total $250,000 and the direct labour rate is $15 per hour.Budgeted labour hours were 500,000,and actual labour hours were 524,000.Actual indirect overhead was $274,600.
What are the actual and normal indirect-cost rates respectively?

A)$0.52 and $0.50
B)$0.50 and $0.52
C)$0.55 and $0.48
D)$0.67 and $0.65
E)$0.65 and $0.67

Question 43

Budgeted fixed indirect costs remain constant at $150,000 per month.During high-output months variable indirect costs are budgeted at $120,000,and during low-output months budgeted variable costs are $60,000.What are the respective high and low indirect cost rates if budgeted professional labour-hours are 6,000 for high-output months and 2,000 for low-output months?

A)$31.25 per hour,$87.50 per hour
B)$45.00 per hour,$95.00 per hour
C)$45.00 per hour,$105.00 per hour
D)$56.20 per hour,$105.00 per hour
E)$59.00 per hour,$105.00 per hour

Question 44

A local financial consulting firm employs 30 full-time staff.The budgeted compensation per employee is $50,000,for 2,000 hours.All direct labour costs are charged to clients.
Any other costs are included in a single indirect-cost pool,allocated according to labour-hours.Actual indirect costs were $750,000.Budgeted indirect costs for the year are $525,000 and the firm expects to have 60 clients during the coming year.
What is the total cost of a job which took 27 hours,using normal costing?

A)$911.25
B)$1,012.50
C)$27,337.50
D)$30,375.00
E)$50,000.00

Question 45

Normal costing refers to

A)the average cost.
B)costs within the relevant range.
C)costs that behave like other similar costs.
D)costs included in normal pools.
E)allocating indirect costs at budgeted rates.

Question 46

A job cost record (or job cost sheet)is a document where the costs are recorded and accumulated.

Question 47

Managers and accountants collect most of the cost information that goes into their information systems through

A)an information databank.
B)computer programs.
C)source documents.
D)time surveys.
E)interviewing workers.

Question 48

The main advantage of using budgeted cost rates rather than actual cost rates is

A)budgeted costs allow managers to have cost information on a timely basis.
B)budgeted costs may be subject to short-run fluctuations.
C)budgeted indirect-cost rates are known prior to the inception of a new job.
D)actual indirect-cost rates are affected by work done on other jobs.
E)budgeted rates are just as accurate and require less effort.

Question 49

A materials requisition record and a labour time record are examples of which of the following?

A)normal cost schedule
B)job cost sheets
C)job cost records
D)cost object statements
E)source documents

Question 50

A machine shop has direct materials cost of $1,800,000 direct labour of $4,200,000 (direct labour rate is $50 per hour)and budgeted indirect manufacturing costs of $850,000.Management believes that indirect manufacturing costs increase with direct labour hours.What is the budgeted indirect manufacturing cost rate?

A)$2.12
B)$2.33
C)$4.94
D)$10.12
E)$17.00

Question 51

Which of the following is part of the approach to computing the budgeted indirect cost allocation rate?

A)identify the costs which are part of the indirect cost pool
B)identify costs associated with the direct cost pool
C)estimate the cost items for direct cost pool
D)adjust the cost allocation base for variances
E)divide the total quantity of the cost allocation base into the total costs in the direct cost pool

Question 52

Fixed costs remain constant at $200,000 per month.During high-output months variable costs are $160,000,and during low-output months variable costs are $40,000.What are the respective high and low indirect cost allocation rates if professional labour-hours are 8,000 for high-output months and 2,000 for low-output months?

A)$45.00 per hour;$120.00 per hour
B)$45.00 per hour;$45.00 per hour
C)$25.00 per hour;$20.00 per hour
D)$56.20 per hour;$120.00 per hour
E)$25.00 per hour;$100.00 per hour

Question 53

Using normal costing the amount of supervisory salaries to allocate is determined by calculating

A)actual direct-cost rates times actual quantities of direct-cost inputs.
B)actual indirect-cost rates times actual quantities of cost-allocation bases.
C)actual direct-cost rates times budgeted quantities of input.
D)budgeted indirect-cost rates times actual quantities of cost-allocation bases.
E)budgeted indirect-cost rates times budgeted quantities of cost-allocation bases.

Question 54

Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs:
A.Select the cost-allocation bases to use for allocating indirect costs to the job
B.Compute the rate per unit of each cost-allocation base used to allocate indirect costs to the job
C.Compute the total cost of the job by adding all direct and indirect costs assigned to the job
D.Identify the direct costs of the job
E.Compute the indirect costs allocated to the job
F.Identify the indirect costs associated with each cost-allocation base
G.Identify the job that is the chosen cost object

A)G,F,A,B,E,D,C
B)G,D,A,B,F,E,C
C)G,A,F,B,E,D,C
D)G,A,D,F,B,E,C
E)G,D,A,F,B,E,C

Question 55

The first step in job costing is to

A)identify the cost object.
B)identify the direct costs.
C)select the cost allocation base.
D)identify the indirect costs.
E)compute the rate per unit.

Question 56

The difference between actual costing and normal costing is

A)normal costing uses actual direct cost rates.
B)actual costing uses actual quantities of direct cost inputs.
C)normal costing uses budgeted quantities of actual direct cost inputs and budgeted indirect cost rates.
D)actual costing uses actual quantities of cost allocation bases.
E)normal costing uses budgeted indirect cost rates.

Question 57

A local financial consulting firm employs 30 full-time employees.The budgeted compensation per employee is $50,000.The annual maximum chargeable time to each client is 1,000 hours.Clients always receive their full amount of time.All labour costs are included in a single direct-cost category and are traced to jobs on a per-hour basis.
Any other costs are included in a single indirect-cost pool,allocated according to professional labour-hours.Budgeted indirect costs for the year are $1,050,000,and the firm expects to have 60 clients during the coming year.
What is the budgeted indirect-cost rate per hour?

A)$1,050.00 per hour
B)$50.00 per hour
C)$35.00 per hour
D)$17.50 per hour
E)$10.00 per hour

Question 58

Managers and accountants gather the information that goes into their cost systems through source documents,which are the original records that support journal entries in an accounting system.

Question 59

To smooth seasonal fluctuating levels of output,separate indirect-cost rates should be calculated for each month.

Question 60

Which of the following statements about normal costing is TRUE?

A)Direct costs and indirect costs are allocated using an actual rate.
B)Direct costs and indirect costs are traced using budgeted rates.
C)Direct costs are traced using a budgeted rate,and indirect costs are allocated using an actual rate.
D)Direct costs are traced using an actual rate,and indirect costs are allocated using a budgeted rate.
E)Direct costs are traced by using the actual direct-cost rate times the budgeted quantity of the direct costs input.

Question 61

Use the information below to answer the following question(s).
World Engines Ltd.manufactures custom engines for use in the lawn and garden equipment industry.The company allocates manufacturing overhead based on machine hours.Selected data for costs incurred for Job 787 are as follows:

What is the total manufacturing cost of Job 787 using normal costing?

A)$17,100
B)$14,960
C)$12,800
D)$15,500
E)$14,300

Question 62

Use the information below to answer the following question(s).
Jim's Computer Products manufactures keyboards for computers.In June,the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2.The budgeted manufacturing overheads for the month were $34,500 and $37,500,respectively.For Job 501,the actual costs incurred in the two departments were as follows:
Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2.The company uses a budgeted departmental overhead rate for applying overhead to production.
What is the budgeted indirect cost allocation rate for Department 2?

A)$3.45
B)$3.75
C)$4.60
D)$7.50
E)$8.00

Question 63

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
What is the budgeted indirect cost allocation rate per unit of the allocation base for the professional liability insurance?

A)$16.67
B)$25.00
C)$1.67
D)$26.67
E)$12.50

Question 64

Use the information below to answer the following question(s).
The following data were taken from the records of Big Sky Ltd. ,a manufacturing company.The company has been calculating the actual indirect cost allocation rate using direct labour hours as the allocation base.

What is the actual indirect cost rate at Big Sky Ltd.using machine hours as the allocation base?

A)$60.67
B)$10.67
C)$7.89
D)$4.05
E)$3.84

Question 65

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
What is the budgeted direct cost rate for dental assistant labour?

A)$17.875 per hour
B)$16.125 per hour
C)$13.750 per hour
D)$11.250 per hour
E)$9.125 per hour

Question 66

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
What is the budgeted direct cost rate per hour for office staff?

A)$11.250 per hour
B)$9.625 per hour
C)$7.500 per hour
D)$6.875 per hour
E)$6.125 per hour

Question 67

Use the information below to answer the following question(s).
A Hospital uses a job cost system for all surgery patients.In February,the pre-operating room (PRE-OP)and operating room (OR)had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours,respectively,and budgeted nursing overhead charges were $28,000 and $22,000,respectively.The hospital ward rooms for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month.PRE-OP,OR and the hospital ward have separate indirect cost pools.The hospital uses a budgeted overhead rate for applying overhead to patient stays.
For patient Jones,actual hours incurred were six and eight hours,respectively,in the PRE-OP and OR rooms.He was in the hospital for 5 days (120 hours).Other costs related to Jones were:

What is the budgeted overhead rate for the hospital floor for surgery?

A)$28.00
B)$44.00
C)$45.75
D)$47.75
E)$80.00

Question 68

Use the information below to answer the following question(s).
Jim's Computer Products manufactures keyboards for computers.In June,the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2.The budgeted manufacturing overheads for the month were $34,500 and $37,500,respectively.For Job 501,the actual costs incurred in the two departments were as follows:
Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2.The company uses a budgeted departmental overhead rate for applying overhead to production.
What is the total cost assigned to Job 501 based on normal costing?

A)$27,600
B)$91,200
C)$96,900
D)$123,900
E)$126,500

Question 69

Use the information below to answer the following question(s).
A Hospital uses a job cost system for all surgery patients.In February,the pre-operating room (PRE-OP)and operating room (OR)had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours,respectively,and budgeted nursing overhead charges were $28,000 and $22,000,respectively.The hospital ward rooms for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month.PRE-OP,OR and the hospital ward have separate indirect cost pools.The hospital uses a budgeted overhead rate for applying overhead to patient stays.
For patient Jones,actual hours incurred were six and eight hours,respectively,in the PRE-OP and OR rooms.He was in the hospital for 5 days (120 hours).Other costs related to Jones were:

What was the total OR cost for patient Jones?

A)$2,418
B)$2,514
C)$2,250
D)$2,602
E)$2,474

Question 70

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
What is the budgeted direct cost rate per hour for professional partner labour?

A)$25.00 per hour
B)$50.00 per hour
C)$44.50 per hour
D)$38.00 per hour
E)$46.00 per hour

Question 71

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
What would be the percentage change in the budgeted direct cost rate if they consider hiring one more employee,as part of the office staff?

A)3.0%
B)2.0%
C)1.0%
D)0.5%
E)0%

Question 72

Normandeau Company's actual indirect cost pool amounted to $1,400,000 and the direct labour pool was $5,400,000.Overhead is allocated on the basis of direct labour hours.Actual and budgeted direct labour hours were 25,000 and 30,000 for the period.What is the manufacturing overhead cost allocation rate using actual direct labour hours as the cost allocation base?

A)$46.67
B)$272.00
C)$75.00
D)$226.67
E)$56.00

Question 73

Use the information below to answer the following question(s).
The following data were taken from the records of Big Sky Ltd. ,a manufacturing company.The company has been calculating the actual indirect cost allocation rate using direct labour hours as the allocation base.

What is the actual indirect cost rate at Big Sky Ltd.using direct labour hours as the allocation base?

A)$384.00
B)$7.68
C)$18.00
D)$19.00
E)$138.89

Question 74

A law office employs full-time attorneys and five paraprofessionals.For the current year indirect costs were budgeted at $225,000,but actually amounted to $350,000.
Direct and indirect costs are applied on a professional labour-hour basis which includes both attorney and paraprofessional hours.Total budgeted labour-hours were 25,000;however,actual labour-hours were 30,000.
What is the actual indirect-cost rate,if a client used 5,000 professional labour-hours?

A)$5.00
B)$9.00
C)$7.50
D)$14.00
E)$11.67

Question 75

Use the information below to answer the following question(s).
Capable Carts manufactures custom carts for a variety of uses.The following data have been recorded for Job 892,which was recently completed.Direct materials used cost $6,300,the budgeted direct materials were $5,900.There were 180 direct labour hours worked on this job at a direct labour wage rate of $20 per hour;the budgeted direct labour wage rate was $21 per hour.There were 75 machine hours used on this job.The budgeted and actual indirect cost allocation rates are $32 and $29 per machine hour used,respectively.
What is the total manufacturing cost of Job 892 using normal costing?

A)$9,900
B)$12,300
C)$12,080
D)$12,255
E)$12,075

Question 76

Use the information below to answer the following question(s).
A Hospital uses a job cost system for all surgery patients.In February,the pre-operating room (PRE-OP)and operating room (OR)had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours,respectively,and budgeted nursing overhead charges were $28,000 and $22,000,respectively.The hospital ward rooms for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month.PRE-OP,OR and the hospital ward have separate indirect cost pools.The hospital uses a budgeted overhead rate for applying overhead to patient stays.
For patient Jones,actual hours incurred were six and eight hours,respectively,in the PRE-OP and OR rooms.He was in the hospital for 5 days (120 hours).Other costs related to Jones were:

What was the total PRE-OP cost for patient Jones?

A)$1,400
B)$1,568
C)$1,624
D)$1,664
E)$1,752

Question 77

Use the information below to answer the following question(s).
World Engines Ltd.manufactures custom engines for use in the lawn and garden equipment industry.The company allocates manufacturing overhead based on machine hours.Selected data for costs incurred for Job 787 are as follows:

What is the total manufacturing cost of Job 787 using actual costing?

A)$17,100
B)$14,960
C)$12,800
D)$15,500
E)$14,300

Question 78

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
What would be the new budgeted direct cost rate if they decided to give all of the dental assistants a 10% raise?

A)$13.000 per hour
B)$12.375 per hour
C)$11.250 per hour
D)$9.875 per hour
E)$9.125 per hour

Question 79

Use the information below to answer the following question(s).
Capable Carts manufactures custom carts for a variety of uses.The following data have been recorded for Job 892,which was recently completed.Direct materials used cost $6,300,the budgeted direct materials were $5,900.There were 180 direct labour hours worked on this job at a direct labour wage rate of $20 per hour;the budgeted direct labour wage rate was $21 per hour.There were 75 machine hours used on this job.The budgeted and actual indirect cost allocation rates are $32 and $29 per machine hour used,respectively.
What is the total manufacturing cost of Job 892 using actual costing?

A)$9,900
B)$12,300
C)$12,080
D)$12,255
E)$12,075

Question 80

Use the information below to answer the following question(s).
Jim's Computer Products manufactures keyboards for computers.In June,the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2.The budgeted manufacturing overheads for the month were $34,500 and $37,500,respectively.For Job 501,the actual costs incurred in the two departments were as follows:
Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2.The company uses a budgeted departmental overhead rate for applying overhead to production.
What is the budgeted indirect cost allocation rate for Department 1?

A)$3.45 per hour
B)$3.75 per hour
C)$6.90 per hour
D)$7.50 per hour
E)$8.00 per hour