1) One Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $313,000 for the year, and machine usage is estimated at 125,200 hours.

For the year, $337,611 of overhead costs are incurred and 132,700 hours are used.
(a)Compute the manufacturing overhead rate for the year. (Round answers to 2 decimal places, e.g. 1.25.)
Manufacturing overhead rate $ _________ per machine hour

2) The ledger of Cust Company has the following work in process account.

Work in Process—Painting
5/1 Balance 4,660 5/31 Transferred out ?
5/31 Materials 7,150
5/31 Labor 3,700
5/31 Overhead 1,410
5/31 Balance ?

Production records show that there were 400 units in the beginning inventory, 30% complete, 1,470 units started, and 1,560 units transferred out. The beginning work in process had materials cost of $2,930 and conversion costs of $1,730. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

(a) How many units are in process at May 31?
Work in process, May 31 ________units

(b) What is the unit materials cost for May? (Round unit costs to 2 decimal places, e.g. 2.25.)
The unit materials cost for May $ ______________

(c) What is the unit conversion cost for May? (Round unit costs to 2 decimal places, e.g. 2.25.)
The unit conversion cost for May $ ________

(d) What is the total cost of units transferred out in May? $________

(e) What is the cost of the May 31 inventory? $__________

3) Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.
Standard Custom
Direct labor costs $55,700 $112,000
Machine hours 1,300 1,320
Setup hours 96 410

Total estimated overhead costs are $300,200. Overhead cost allocated to the machining activity cost pool is $196,600, and $103,600 is allocated to the machine setup activity cost pool.

(a)Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.)
Predetermined overhead rate ________% of direct labor cost

(b) Compute the overhead rates using the activity-based costing approach.

(c) Determine the difference in allocation between the two approaches.

Using these data from the comparative balance sheet of Rosalez Company, perform vertical analysis. (Round percentages to 1 decimal place, e.g. 12.5%.)
Dec. 31, 2012 Dec. 31, 2011
Amount Percentage Amount Percentage
Accounts receivable$ 546,000 _____% $ 353,000 _____ %
Inventory $ 750,500 ______% $ 612,600 ______ %
Total assets $3,149,000 _____% $2,841,100 _____ %

5) Vertical analysis (common-size) percentages for Vallejo Company’s sales, cost of goods sold, and expenses are listed here.
Vertical Analysis 2012 2011 2010
Sales 100 % 100% 100%
Cost of goods sold 61.7 63.5 65.3
Expenses 24.2 27.8 29.2