Kay Company budgets overhead cost of $3,645,000 for the next year. The company uses direct labor hours as its overhead allocation base. If 81,000 direct labor hours are planned for the next year, how much overhead would be assigned to a product requiring 4 direct labor hours?

 Kay Company budgets overhead cost of $3,645,000 for the next year. The company uses direct labor hours as its overhead allocation base. If 81,000 direct labor hours are planned for the next year, how much overhead would be assigned to a product requiring 4 direct labor hours?
Multiple Choice
•    
$45.00
•    
$35.00
•    
$180.00
•    
$140.00
•    
None of the choices

Answer

$180.00

Explanation

($3,645,000/81,000) x 4 = 180

Kay Company budgets overhead cost of $4,770,000 for the next year. The company uses direct labor hours as its overhead allocation base. If 106,000 direct labor hours are planned for the next year, what is the company's plantwide overhead rate?
Multiple Choice
•    
$0.22 per direct labor hour.
•    
$45.00 per direct labor hour.
•    
$35.85 per direct labor hour.
•    
$9.15 per direct labor hour.
•    
$0.11 per direct labor hour.

Answer

 $45.00 per direct labor hour.

Explanation

( $4,770,000/106,000) =  $45.00 per direct labor hour.

Which types of overhead allocation methods result in the use of more than one overhead rate during the same time period?
Multiple Choice
•    
Plantwide overhead rate method and departmental overhead rate method.
•    
Cost pool overhead rate method and plantwide overhead rate method.
•    
Departmental overhead rate method and activity-based costing.
•    
Activity-based costing and plantwide overhead rate method.
•    
Departmental overhead rate method and cost pool overhead rate method.

Answer

Departmental overhead rate method and activity-based costing

 

The use of departmental overhead rates will generally result in:
Multiple Choice
•    
The use of a single cost allocation base.
•    
The use of a single overhead rate for the factory.
•    
The use of a separate cost allocation base for each department in the factory.
•    
The use of a separate cost allocation base for each activity in the factory.
•    
The use of a separate cost allocation base for each month.

Answer

 The use of a separate cost allocation base for each activity in the factory.

From an ABC perspective, what causes overhead cost to be incurred?
Multiple Choice
•    
Financial transactions.
•    
The volume of units produced.
•    
Debits and credits.
•    
Management decisions.
•    
Activities.

Answer

 Activities.

Overhead costs:
Multiple Choice
•     Can only be assigned using activity cost drivers.
•    
Can be traced to units of product in the same way that direct materials can.
•    
Cannot be traced to units of product in the same way that direct labor can.
•     Cannot be allocated to products.
•     Can only be assigned using volume-based measures like direct labor hour or machine hours. 

Answer

Cannot be traced to units of product in the same way that direct labor can.

I'm not sure about the last answer, you may check it from other sources as well.