Buker Corporation estimates that the factory

Buker Corporation estimates that the factory

Question 1Buker Corporation estimates that the factory overhead for the coming year will be $2,198,540. Thecompany has decided that the basis for applying factory overhead should be machine hours, which isestimated to be 74,000 hours. Calculate the predetermined overhead rate to apply factory overhead.Round your answer to two decimal places.$22.04$29.59$7.67$29.71Question 2At a volume of 8,000 units, Pwerson Company incurred $32,000 in factory overhead costs, including$12,000 in fixed costs. If volume increases to 9,000 units and both 8,000 units and 9,000 units are withinthe relevant range, then the company would expect to incur total factory overhead costs of:$22,500$32,000$34,500$20,000Question 3Holdt Inc. produces and sells a single product. The selling price of the product is $110.00 per unit and itsvariable cost is $70 per unit. The fixed expense is $160,000 per month. The break-even sales (units) is:4,0005,5006,5002,500Question 4Holdt Inc. produces and sells a single product. The selling price of the product is $110.00 per unit and itsvariable cost is $70 per unit. The fixed expense is $160,000 per month. The sales (units) required torealize a profit of $100,000 is:4,0005,5006,5002,500Question 5The primary advantages of the average rate of return method are its ease of computation and the factthatit is especially useful to managers whose primary concern is liquiditythere is less possibility of loss from changes in economic conditions and obsolescencewhen the commitment is short-termit emphasizes the amount of income earned over the life of the proposalrankings of proposals are necessarysQuestion 6The amount of the average investment for a proposed investment of $120,000 in a fixed asset with auseful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of$21,600 for the 4 years, is$30,000$21,600$5,400$60,000Question 7An anticipated purchase of equipment for $490,000 with a useful life of 8 years and no residual value isexpected to yield the following annual net incomes and net cash flows:YearNet IncomeNet Cash Flow1$60,000$110,000250,000100,000350,000100,000440,00090,000540,00090,000640,00090,000740,00090,000840,00090,000What is the cash payback period?5 years4 years6 years3 yearsQuestion 8The expected average rate of return for a proposed investment of $4,800,000 in a fixed asset, usingstraight-line depreciation, with a useful life of 20 years, no residual value, and an expected total netincome of $10,560,000 over the 20 years is24%22%45%10%Question 9The management of Indiana Corporation is considering the purchase of a new machine costing$400,000. The company’s desired rate of return is 10%. The present value factors for $1 at compoundinterest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In additionto the foregoing information, use the following data in determining the acceptability of this investment:Income fromOperationsNet Cash1$100,000$180,000260,000120,000330,000100,000YearFlow410,00090,000510,00090,000The average rate of return for this investment is18%21%53%10%Question 10A series of equal cash flows at fixed intervals is termed a(n)present value indexprice-level indexnet cash flowannuityQuestion 11Using the following partial table of present value of $1 at compound interest, the present value of$15,000 to be received 3 years hence with earnings at the rate of 6% a year isYear6%10%12%10.9430.9090.89320.8900.8260.79730.8400.7510.71240.7920.6830.636$12,600$11,880$13,350$11,265Question 12An analysis of a proposal by the net present value method indicated that the present value of future cashinflows exceeded the amount to be invested. Which of the following statements best describes theresults of this analysis?The proposal is desirable and the rate of return expected from the proposal exceeds theminimum rate used for the analysis.The proposal is desirable and the rate of return expected from the proposal is less thanthe minimum rate used for the analysis.The proposal is undesirable and the rate of return expected from the proposal is lessthan the minimum rate used for the analysis.The proposal is undesirable and the rate of return expected from the proposal exceedsthe minimum rate used for the analysis.Question 13Motel Corporation is analyzing a capital expenditure that will involve a cash outlay of $208,240.Estimated cash flows are expected to be $40,000 annually for 7 years. The present value factors for anannuity of $1 for 7 years at interest of 6%, 8%, 10%, and 12% are 5.582, 5.206, 4.868, and 4.564,respectively. The internal rate of return for this investment is10%6%12%8%Question 14By converting dollars to be received in the future into current dollars, the present value methods takeinto consideration that moneyhas an international rate of exchangeis the language of businessis the measure of assets, liabilities, and stockholders’ equity on financial statementshas a time valueQuestion 15Below is a table for the present value of an annuity of $1 at compound interest.Year6%10%12%10.9430.9090.89321.8331.7361.69032.6732.4872.40243.4653.1703.03754.2123.7913.605Using the tables above, what would be the present value of $25,000 (rounded to the nearest dollar) tobe received 4 years from today, assuming an earnings rate of 10%?$19,800$17,075$79,250$15,525Question 16Pinacle Corp. budgeted $700,000 of overhead cost for the current year. Actual overhead costs for theyear were $650,000. Pinacle’s plantwide allocation base, machine hours, was budgeted at 100,000hours. Actual machine hours were 80,000. A total of 100,000 units was budgeted to be produced and98,000 units were actually produced. Pinacle’s plantwide factory overhead rate for the current year is:$8.13 per machine hour$7.00 per machine hour$6.50 per machine hour$8.75 per machine hourQuestion 17Adirondak Marketing Inc. manufactures two products, A and B. Presently; the company uses a singleplantwide factory overhead rate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system for allocating overhead.Total DirectLabor HoursDLH per ProductAB$250,00010,00016475,00012,000416$325,00022,0002020OverheadPainting Dept.Finishing Dept.TotalsCalculate the overhead rate per unit for Product A in the painting department of Adirondack MarketingInc.$325.00 per unit$147.70 per unit$236.32 per unit$161.00 per unitQuestion 18The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in twodepartments, Fabrication and Assembly. Data for the products and departments are listed below.Number ofLabor HoursPer UnitMachine HoursProductUnitsPer UnitBlinks1,00045Dinks2,00028All of the machine hours take place in the Fabrication department, which has an estimated overhead of$84,000. All of the labor hours take place in the Assembly department, which has an estimated totaloverhead of $72,000.The Ramapo Company uses a single overhead rate to apply all overhead costs. What would the singleplantwide rate be if it was based on machine hours instead of labor hours?$9.00 per machine hour$19.50 per machine hour$7.43 per machine hour$4.00 per machine hourQuestion 19The Roget Factory has determined that its budgeted factory overhead budget for the year is$15,500,000. They plan to produce 2,000,000 units. Budgeted direct labor hours are 1,050,000 andbudgeted machine hours are 750,000. Using the single plantwide factory overhead rate based on directlabor hours, calculate the factory overhead rate for the year.$14.76$20.67$7.75$77.50Question 20Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a singleplantwide factory overhead rate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system for allocating overhead. The following tablepresents information about estimated overhead and direct labor hours.OverheadPainting Dept.Finishing Dept.Totals$248,00072,000$320,000Direct LaborHours (dlh)10,000 dlh10,00020,000 dlhProductAB16 dlh420 dlh4 dlh1620 dlhDetermine the overhead rate in the Painting Department for each unit of Product B if Blue RidgeMarketing Inc. uses a multiple department rate system.$49.60 per unit$99.20 per unit$28.80 per unit$64.00 per unitQuestion 21The Botosan Factory has determined that its budgeted factory overhead budget for the year is$13,500,000 and budgeted direct labor hours are 10,000,000. If the actual direct labor hours for theperiod are 350,000, how much overhead would be allocated to the period?$675,000$470,630$472,500$236,250Question 22Scoresby Co. uses 6 machine hours and 2 direct labor hours to produce Product X. It uses 8 machinehours and 16 direct labor hours to produce Product Y. Scoresby’s Assembly and Finishing departmentshave factory overhead rates of $240 per machine hour and $160 per direct labor hour, respectively. Howmuch overhead cost will be charged to the two products?Product X = $3,200; Product Y = $9,600Product X = $800; Product Y = $800Product X = $1,760; Product Y = $4,480Product X = $1,440; Product Y = $2,560Question 23The Aleutian Company produces two products, Rings and Dings. They are manufactured in twodepartments—Fabrication and Assembly. Data for the products and departments are listed below.ProductLabor HoursMachine HoursNumber of UnitsPer UnitPer UnitRings1,00046Dings2,00039All of the machine hours take place in the Fabrication Department, which has an estimated overhead of$90,000. All of the labor hours take place in the Assembly Department, which has an estimated totaloverhead of $105,000.The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machinehours for an allocation base, and the Assembly Department uses labor hours.What is the Assembly Department overhead rate per labor hour?$10.50$19.50$3.75$4.38Question 24Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapesdrives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgetedactivity cost and activity base data by product are provided below.ActivityCostProcurement$ 370,000Activity BaseNumber of purchase ordersScheduling250,000Number of production ordersMaterials handling500,000Number of movesProduct development730,000Number of engineering changesProduction1,500,000NumberNumberMachine hoursofPurchaseOrdersofNumberofProductionMovesOrdersNumber ofNumberEngineeringofMachineChangesUnitsHoursDisk drives4,0003001,400102,0002,000Tape drives4,000150800108,0004,000Wire drives12,0008004,0002510,0002,500Determine the activity rate for procurement per purchase order.$43.53$18.50$15.42$37.00Given the following information, determine the activity rate for setups.Activity PoolActivity BaseBudgeted AmountSetups10,000$180,000Inspections24,000$120,000Assembly (DLH)80,000$400,000$58.00$0.75$5.09$18.00


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