(TCO F) Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year.


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(TCO F) Wahr 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 32,000. The estimated variable manufacturing overhead was $7.17 per labor hour and the estimated total fixed manufacturing overhead was $584,320. The actual labor hours for the year turned out to be 33,300. Required: Compute the company’s predetermined overhead rate for the recently completed year. 2. (TCO C) Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company’s cash budget for November in good form. 1. (TCO C) The following overhead data are for a department of a large company. Actual costs Static Incurred budget Activity level (in units) 800 750 Variable costs: Indirect materials $6,850 $6,600 Electricity $1,312 $1,275 Fixed costs: Administration $3,570 $3,700 Rent $3,320 $3,200 Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department. 2. (TCO D) Lindon Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $80,000 as follows: Direct materials………………………………………..$18,000 Direct labor………………………………………………20,000 Variable manufacturing overhead………………. 12,000 Fixed manufacturing overhead………………….. 30,000 Total costs……………………………………………….80,000 An outside supplier has offered to provide Part X at a price of $13 per unit. If Lindon stops producing the part internally, one third of the manufacturing overhead would be eliminated. Required: Prepare a make­or­buy analysis showing the annual advantage or disadvantage of accepting the outside supplier’s offer. 3. (TCO E) Hanks Company produces a single product. Operating data for the company and its absorption costing income statement for the last year is presented below. Units in beginning inventory……………………………..0 Units produced………………………………………..9,000 Units sold………………………………………………8,000 Sales…………………………………………………$80,000 Less cost of goods sold: Beginning inventory………………………………………. 0 Add cost of goods manufactured………………54,000 Goods available for sale………………………….54,000 Less ending inventory………………………………6,000 Cost of goods sold………………………………..48,000 Gross margin……………………………………….32,000 Less selling and admin. expenses……………..28,000 Net operating income…………………………..$ 4,000 Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold. Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements. 4. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Karmana Corporation for the just­completed year. Sales ……………………………………………………….$950 Raw materials inve

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