Owner Essay

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1. | Question : | (TCO F) Buckhorn Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below. Estimated machine hours | 85,000 | Estimated variable manufacturing overhead | $5.55 per machine hour | Estimated total fixed manufacturing overhead | $951,888 | Required: Compute the company's predetermined overhead rate. | | | Student Answer: | | TOTAL manufacturing overhead =$951,888 +($5.55*$85,000)=$1423,638 Company’s predetermined overhead rate=$1423,638/$85,000=$16.75 or $16.748 | | Instructor Explanation: | Estimated total manufacturing overhead = $951,888 + ($5.55 per machine hour  85,000 machine hours) = $1,423,638 Predetermined overhead rate = estimated total manufacturing overhead  estimated total amount of the allocation base = $1,423,638  85,000 machine hours = $16.75 per machine hour. See Chapter 3. | | 2. | Question : | (TCO F) Payment Inc. is preparing its cash budget for February. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $136,000 and budgeted cash disbursements total $128,000. The desired ending cash balance is $50,000. The company can borrow up to $110,000 at any time from a local bank with interest not due until the following month. Required: Prepare the company's cash budget for February in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance. | | | Student Answer: | | Beginning cash balance $27,000 ADD :Cash Receipts $136,000 Total available cash $163,000 LESS: cash disbursements ($128,000) Total $35,000 Borrowings needed $15,000 Desired ending balance $50,000 | | Instructor Explanation: | See Chapter 8. | | 1. | Question : | (TCO C) Nic Saybin Enterprises Accounting Department collects all pertinent monthly

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