Which of the following statements is incorrect? OA. If MOH is overallocated to a job that has been sold, and the company calculates sales price by marking up job costs, the job will likely be underpriced. OB. The formula to arrive at the POHR is total budgeted manufacturing overhead divided by total estimated allocation base. O C. To calculate the increase to WIP for allocated MOH costs, the POHR is multiplied by the actual amount of the allocation based used by the cost object. D. "Number of units" is typically not an appropriate allocation base for MOH because the company's products do not consume equal overhead resources. O E. If the over/underallocated MOH is fairly large and the majority of the units have not been sold, the balance in MOH should be prorated between WIP, FG, and COGS.

Which of the following statements is incorrect? OA. If MOH is overallocated to a job that has been sold, and the company calculates sales price by marking up job costs, the job will likely be underpriced. OB. The formula to arrive at the POHR is total budgeted manufacturing overhead divided by total estimated allocation base. O C. To calculate the increase to WIP for allocated MOH costs, the POHR is multiplied by the actual amount of the allocation based used by the cost object. D. "Number of units" is typically not an appropriate allocation base for MOH because the company's products do not consume equal overhead resources. O E. If the over/underallocated MOH is fairly large and the majority of the units have not been sold, the balance in MOH should be prorated between WIP, FG, and COGS.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 1P: The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent...

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In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?
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Question: In cost accounting, what is the primary purpose of calculating the predetermined overhead rate? A) To allocate indirect costs to products based on a predetermined formula.B) To determine the actual overhead costs incurred during a specific production period.C) To calculate variable costs associated with each unit of production.D) To assess fixed costs that remain constant regardless of production levels.
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Determining the basis for applying manufacturing overhead costs involves OA. primarily the accumulation of direct labor hours since virtually all overhead costs are driven by direct labor hours. B. primarily the maintaining of accurate records of production volume since virtually all overhead costs are driven by the number of units proc OC. the determination of a measure of activity that is a causal factor in the incurrence of overhead cost. OD. actual rather than budgeted levels of activity. Reset Selection