14) Fixed costs remain constant at $400,000 per month. Duringhigh-output months variable costs are $320,000, and duringlow-output months variable costs are $80,000. What are therespective high and low indirect-cost rates if budgetedprofessional labor-hours are 16,000 for high-output months and4,000 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
15) Tiscara Company manufactures insulation and appliesmanufacturing overhead costs to production at a budgetedindirect-cost rate of $15 per direct labor-hour. The following dataare obtained from the accounting records for June 2014:
Directmaterials $440,000
Direct labor (3,500 hours @$11/hour) 38,500
Indirectlabor 15,000
Plant facilityrent 50,000
Depreciation on plant machinery andequipment 35,000
Salescommissions 10,000
Administrativeexpenses 25,000
The actual amount of manufacturing overhead costs incurred inJune 2014 totals ________.
A) $278,500
B) $100,000
C) $80,000
D) $110,000
Answer the following questions using the information below:
Roiann and Dennett Law Office employs 12 full-time attorneys and10 paraprofessionals. Direct and indirect costs are applied on aprofessional labor-hour basis that includes both attorney andparaprofessional hours. Following is information for 2014:
Budget Actual
Indirectcosts $270,000 $300,000
Annual salary of eachattorney $100,000 $110,000
Annual salary of each paraprofessional $29,000 $ 30,000
Total professionallabor-hours 50,000 dlh 60,000 dlh
16) What are the actual direct-cost rate and the actualindirect-cost rate, respectively, per professional labor-hour?
A) $27.00; $4.17
B) $29.80; $5.40
C) $32.40; $5.00
D) $27.00; $5.00
17) How much should the client be billed in an actual costingsystem if 200 professional labor-hours are used?
A) $5,000
B) $6,960
C) $7,480
D) $6,400
