Question

1. Sarratt Corporation's contribution margin ratio is 77% and its fixed monthly expenses are $46,000. Assume that the company's sales for May are expected to be $105,000. Required: Estimate the company's net operating income for May, assuming that the fixed monthly expenses do not change.

2. In activity-based costing, the activity rate for an activity cost pool is computed by dividing the total overhead cost in the activity cost pool by:

  • the total direct labor-hours for the activity cost pool.

  • the direct labor-hours required by the product.

  • the machine-hours required by the product.

  • the total activity for the activity cost pool.

Which of the following is correct? The break-even point occurs on the CVP graph where:

  • total contribution margin equals total fixed expenses.

  • total profit equals total fixed expenses.

  • total profit equals total expenses.

  • total variable expenses equal total contribution margin.

Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,940 hours and the total estimated manufacturing overhead was $530,948. At the end of the year, actual direct labor-hours for the year were 21,850 hours and the actual manufacturing overhead for the year was $530,948. Overhead at the end of the year was:

  • $2,178 overapplied

  • $2,178 underapplied

  • $2,228 underapplied

  • $2,228 overapplied

If manufacturing overhead is underapplied, then:

  • the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred.

  • the predetermined overhead rate is too high.

  • the Manufacturing Overhead account will have a credit balance at the end of the year.

  • actual manufacturing overhead cost is less than estimated manufacturing overhead cost.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Contribution Margin = 105,000*77% = $80,850

Less: Fixed expenses = 46,000

Net Operating Income = $34,850

2. · the total activity for the activity cost pool.

3. · total contribution margin equals total fixed expenses.

4.Predetermined rate = 530,948/21,940 = $24.2 per hour

Applied = 24.2*21,850 = $528,770

Actual Overheads = $530,948

Underapplied = $2,178

· $2,178 underapplied

· the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred.

Add a comment
Know the answer?
Add Answer to:
1. Sarratt Corporation's contribution margin ratio is 77% and its fixed monthly expenses are $46,000. Assume...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year,...

    Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,940 hours and the total estimated manufacturing overhead was $530,948. At the end of the year, actual direct labor-hours for the year were 21,850 hours and the actual manufacturing overhead for the year was $530,948. Overhead at the end of the year was: (Round your Intermediate calculations to 2 decimal places.) Multiple Choice $2,228 underapplied $2,178 underapplied $2,178 overapplied...

  • Crich Corporation uses direct labor hours in its predetermined overhead rate. At the beginning of the...

    Crich Corporation uses direct labor hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,880 hours and the total estimated manufacturing overhead was $516,368. At the end of the year, actual direct labor-hours for the year were 21700 hours and the actual manufacturing overhead for the year was $516,368. Overhead at the end of the year was: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $4298 overapplied $4,298 underapplied O...

  • 15) Durphey Corporation has provided the following data concerning last month's operations. Purchases of raw materials...

    15) Durphey Corporation has provided the following data concerning last month's operations. Purchases of raw materials $5,000 Indirect materials included in manufacturing overhead 4,000 Direct labor cost $58.000 Manufacturing overhead applied to Work in Process 399,000 Beginning Ending Raw materials inventory 11.000 17,000 How much is the total manufacturing cost for the month on the Schedule of Cost of Goods Manufactured? A) $176,000 B) $172,000 C) $152,000 D) $224,000 16) Crich Corporation uses direct labor-hours in its predetermined overhead rate....

  • 15) Duphy Corporation has provided the following data concerning last month's operations Purchases of raw materials...

    15) Duphy Corporation has provided the following data concerning last month's operations Purchases of raw materials $ 25,000 Indirect materials included in manufacturing overhead $ 4,000 Direct labor cost $ 58,000 acturing whead applied to Work in Process $ 99,000 Beginning Ending $ 11,000 $ 17,000 How much is the total nanufacturing cost for the month on the Schedule of Cost of Goods Manufactured? A) 3176,000 B) 5172,000 C) 3152,000 D) 5224,000 16) Crich Corporationes direct labor-hours in its predetermined...

  • 12. Bumpass Corporation's contribution margin ratio is 77% and its fixed monthly expenses are $ 46,000....

    12. Bumpass Corporation's contribution margin ratio is 77% and its fixed monthly expenses are $ 46,000. Assume that the company's sales for May are expected to be $ 105,000. Required: Estimate the company's net operating income for May, assuming that the fixed monthly expenses do not change. (Omit the "$" sign in your response.)   Net operating income $   

  • Osborn Manufacturing uses a predetermined overhead rate of $19.50 per direct labor-hour. This predetermined rate was...

    Osborn Manufacturing uses a predetermined overhead rate of $19.50 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $259,350 of total manufacturing overhead for an estimated activity level of 13,300 direct labor-hours. The company incurred actual total manufacturing overhead costs of $253,000 and 12,800 total direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. Manufacturing overhead overapplied/underapplied (choose one) by ________. 2. Assuming that the...

  • I ALWAYS THUMBS UP, THANKS Osborn Manufacturing uses a predetermined overhead rate of $18.90 per direct...

    I ALWAYS THUMBS UP, THANKS Osborn Manufacturing uses a predetermined overhead rate of $18.90 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $240,030 of total manufacturing overhead for an estimated activity level of 12,700 direct labor-hours. The company incurred actual total manufacturing overhead costs of $237,000 and 12,200 total direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period, Manufacturing overhead by 2. Assuming that...

  • Osborn Manufacturing uses a predetermined overhead rate of $19.20 per direct labor-hour. This predetermined rate was...

    Osborn Manufacturing uses a predetermined overhead rate of $19.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $249,600 of total manufacturing overhead for an estimated activity level of 13,000 direct labor-hours. The company actually incurred $247,000 of manufacturing overhead and 12,500 direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of...

  • Moscone Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 78,000 labor-hours. The esti

    Moscone Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcomingyear. At the beginning of the most recently completed year, the company estimated the labor-hours for theupcoming year at 78,000 labor-hours. The estimated variable manufacturing overhead was $9.99 per labor-hourand the estimated total fixed manufacturing overhead was $985,920. The actual manufacturing overhead for theyear was $1,812,700 and the company’s direct labor workers worked a total of 80,000 labor-hours.Required:1. Compute the company's predetermined overhead rate.2. Compute the amount...

  • please explain Lien Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of...

    please explain Lien Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, 10. the estimated direct labor-hours were 22,060 hours and the total estimated manufacturing overhead was $560,324 At the end of the year, actual direct labor-hours for the year were $2.000 hour and the actual manufacturing overhead for the year was $560,324 Overhead at the end of the year was A) $1524 overapplied B) $1524 underapplied C) $1574 overapplied D) $1574 underapplied

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT