If the predetermined overhead rate is based on the estimated level of activity for the current period, then products will be charged only for the capacity that they use and will not be charged for the capacity they don't use. True or False True False
Q: Overhead costs are underapplied if the amount applied to Work in Process is: O a. greater than…
A: Choice: cost of merchandise sold Clarification: At the point when overhead is under-applied and…
Q: Overapplied overhead will result if A. the plant is operated at less than expected capacity. B.…
A: Overhead is any expense incurred to support the business that is not directly tied to the creation…
Q: When the predetermined overhead rate is based on the level of activity at capacity, an item called…
A: Variable cost: It is the cost that varies with the change in the level of activity
Q: In a manufacturing company using absorption costing, the fixed costs associated with idle production…
A: The question is related to the Absorption costing.
Q: If the activities causing overhead costs are different across different departments and products,…
A: Answer: True
Q: Under variable costing, fixed manufacturing overhead is expensed at the time the units are produced.…
A: There are two costing system followed by the organization. (1) Variable costing method (2)…
Q: he following statements is true? bsorption costing treats fixed overhead as an expense in the period…
A: The income statement is prepared using various methods as absorption costing and variable costing.…
Q: If fixed manufacturing overhead costs are released from inventory under absorption costing, what…
A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…
Q: Classify each of the following items of factory overhead as either a fixed or a variable cost.…
A: The question is based on the concept of Cost Accounting. Classification of fixed and variable costs:…
Q: Under-allocated manufacturing overhead costs are always the result of which of the following…
A: Under Allocated manufacturing overhead occurs when Applied overhead are less than the actual…
Q: Under-applied manufacturing overhead costs are always the result of which of the following…
A: Actual overhead is the actual expense incurred related to the overhead during the period whereas…
Q: Under traditional costing systems, which calculate a single predetermined overhead rate using…
A: Under traditional costing systems, which calculate a single predetermined overhead rate using…
Q: Which would NOT be relevant in a make- or- buy decision? a) factory deprciation b) direct materials…
A: The cost can be classified into two categories i.e fixed cost and variable cost. The FIxed cost…
Q: Overhead costs are underapplied if the amount applied to Work in Process is: a. greater than actual…
A: Overhead means the cost incurred indirectly for the production of goods.
Q: application? . Predetermined overhead rates result in less accurate but more timely information.…
A: Solution Concept Actual overhead rate is the rate that is determined on the basis of actual amount…
Q: Average manufacturing overhead cost per unit usually varies from one periodto the next because: O…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: An allocation base! O a. is a measure used to assign prime costs to products and services O b.…
A: An allocation base is the basis on which Cost accounting allocates overhead costs. An allocation…
Q: Which of the following Overhead cost of a company is likely to have the least control a. Machine…
A: The overhead cost includes total indirect costs incurred in the production process. It includes…
Q: “Abnormal rework costs should be charged to a loss account, not to manufacturing overhead.”Do you…
A: Rework:Rework is that type of product that is not satisfy the ultimate needs of the consumer but by…
Q: Overhead costs are overapplied if the amount applied to Work in Process is: a. less than actual…
A: The overhead costs refer to the costs that are incurred in the operating and manufacturing process,…
Q: What does it means when the Overhead rates in the direct method have a figure which is higher than…
A: Overheads: It refers to the business indirect expenses that are required to run a business activity.…
Q: What are the shortcomings of waiting untilthe actual factory overhead expenses areknown before…
A: Factory Overheads mean indirect costs.
Q: nderapplied factory overhead results when? a. A plant is operated at less than its normal…
A: Factory overhead cost is charged on the basis of overhead rate. Such overhead rate is calculated by…
Q: Overapplied overhead would result if: O a actual overhead costs incurred were less than overhead…
A: Applied Overhead is when a pre determined overhead rate is applied to the production . This pre…
Q: for a contractor, determine the change in the total overhead cost due to the following transa…
A: Overheads, which are also known as Indirect expenses are those expenses that are incurred for…
Q: Explain why the fixed manufacturing overhead cost per unit changes when there is a change in the…
A: Manufacturing overhead costs: "The costs, which do not relate directly with the manufacturing of…
Q: Overhead costs are overapplied if the amount applied to Work in Process is: a. equal to actual…
A: The correct answer is Option b. Less than actual overhead incurred.
Q: Which of the following describes a fixed cost? O a. total cost that fluctuates with changes in…
A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…
Q: When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would…
A: When closing overapplied manufacturing overhead to Cost of Goods Sold, Gross profit will increase.…
Q: When production is greater than sales, fixed manufacturing overhead costs are: a. Deferred in…
A: Variable Costing: Variable costing is the method of costing in which only the variable production…
Q: When used as the denominator in the calculation of an overhead rate, which of the following will…
A: Capacity or activity level helps to determine the maximum or ideal level at which production can be…
Q: When production is greater than sales, fixed manufacturing overhead costs are a. Deferred in…
A: When production is greater than sales, fixed manufacturing overhead costs are deferred in inventory…
Q: The computation of absorption costing gross profit always involves blow subtracting: a. all…
A: Net operating income under absorption costing = Net operating income under variable costing +…
Q: Overhead costs are overapplied if the amount applied to Work in Process is: O a. less than actual…
A: Manufacturing overhead costs can be defined as those costs which are incurred during the…
Q: Overhead costs are overapplied if the amount applied to Work in Process is: O a. less than estimated…
A: SOLUTION 1- Overhead is over applied when more overhead is applied to the jobs than was actually…
Q: Variable costing is concerned with the variable costs and includes direct material, direct labor,…
A: There are different approaches to find net income such as variable costing, absorption costing and…
Q: Support department costs are applied to products as a part of a.fixed manufacturing costs b.fixed…
A: Support department costs are the costs incurred in the support department which are allocated to the…
Q: Underallocated overhead occurs when: A) allocated overhead costs are less than actual overhead…
A: 1. Under allocated overhead - When actual manufacturing costs are more than allocated cost. 2. Over…
Q: If the actual overhead costs incurred are in excess of the applied overhead costs, the difference is…
A: Gross margin is calculated by deducting the expenses from the revenues of the company. It is…
Q: How do you explain the phrase," Fixed overheads consist of costs which are not subject to change…
A: The costs incurred on the production are distinguished as fixed and variable cost.
Q: Which of the following statements is true regarding over-applied manufacturing overhead? O over…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: Select one: a. The balance in the Work-in-Process account after allocation will be higher if the…
A: Underapplied overhead occurs when a business’s expenses have increased than the budgeted expenses.…
Q: When overhead is overapplied, is the balance of Cost of Goods Sold, before adjustment, too low ortoo…
A: The cost of goods that have been sold in a particular period are known as the cost of goods sold…
Q: TRUE/FALSE Blanket rate is where a firm uses only one absorption rate for the whole company. If…
A: Solution: 1. True, Blanket rate is where a firm uses only one absorption rate for the whole company.
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- Why are actual overhead rates seldom used in practice?What does it means when the Overhead rates in the direct method have a figure which is higher than step down method and another which is lower than step down method?How do you explain the phrase," Fixed overheads consist of costs which arenot subject to change with the change in the volume of productive activity."
- It is possible for units in the beginning Work-in-Process Inventory to also be part of the ending Work-in-Process Inventory True or False True False Activity-based costing is based on the concept that products produce activities and activities produce resources. True or False True FalseUnder-applied manufacturing overhead costs are always the result of which of the following situations? O a. Actual overhead costs are greater than estimated overhead costs. of O b. Applied overhead costs are less than actual overhead costs. stion O c. Estimated overhead costs are greater than actual overhead costs. O d. Actual overhead costs are less than applied overhead costs.Which of the following best describes a fixed cost? A. It may only change in total when such change is unrelated to changes in production volume (i.e. inflation). B. It may change in total when such change is related to changes in production volume. C. It is constant per unit of change in production volume. D. It may change in total when such change depends on production volume within the relevant range. QUESTION 2 Period costs are best described as those costs: A. Incurred periodically (i.e. not on a regular basis). B. Incurred as a result of activities that occur inside the production building. C. That increase as a result of a change in volume for a particular period. D. Incurred as a result of activities that occur outside of the production building. QUESTION 3 What is the result when the contribution margin ratio increases? A. Break-even point increases B. Fixed Cost…
- Since overhead costs are indirect costs, Group of answer choices they require some process of allocation. they can be easily traced to production. they cannot be allocated. a predetermined overhead rate is not advantageous.Which of the following statements is FALSE? a. There is a cause-and-effect relationship between the cost driver and the amount of cost. b. Over the long run all costs have cost drivers. c. Volume of production is a cost driver of direct manufacturing costs. d. Fixed costs have cost drivers over the short run.Which of the following is FALSE regarding Variable Costing? O A. Net income will only change if the number of units sold changes. B. If the number of units sold are greater than the number of units produced, a portion of fixed overhead is "deferred." C.Seling and administrative costs are treated as period costs and are expensed as they are incurred. O D. Fixed overhead is treated as a period cost and is expensed as it is incurred. Reset Selection
- Which of the following costs has no relationship with the level of output?a) Semi-variable costs.b) Variable costs.c) Stepped fixed costs.d) Fixed costs.Which of the following statements is TRUE? O A. Variable costs per unit decrease as production levels increase. O B. Fixed costs per unit decrease as production levels increase. OC. Total indirect costs are always greater than total direct costs. O D. Direct costs are usually overheads.Under-allocated manufacturing overhead costs are always the result of which of the following situations? Select one: A. Estimated overhead costs are greater than actual overhead costs. B. Applied overhead costs are less than actual overhead costs. C. Actual overhead costs are greater than estimated overhead costs. D. Actual overhead costs are less than applied overhead costs.