# Owner Essay

2593 Words11 Pages
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