Quiz Chapter 30McK10The actual manufacturing overhead incurred at Gutekunst Corporation during March was $53,000 while the manufacturing overhead applied toWork in Process was $73.000 The Corporation's Cost of Goods Sold wes $451000 prior to closing out its Manufacturing Overhead account. TheCorporation closes out its Manufacturing Overhead account to Cost of Goods Sold Which of the following statements is true!Mule ChoiceManufactug bad was overapped by $20,000 Cost of Goods Sold abercing the Manufacturing the count$471000Manufactug obed was underapplied by $20.000 Cest of Goods Soltau cougout the y$431.000Manufacturing overhead was owned by $20.000 Cest of Goods Sold after coming out the Manufacturing Overwatc$430000Manufacturing overhead was undeeppoed by $20,000 Cost of Goods Soldater dourg out the Mang Overal$471000< Prax10 10Help Save & ExtOvered accountNext >S

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Description: Quiz Chapter 30McK10The actual manufacturing overhead incurred at Gutekunst Corporation during March was $53,000 while the manufacturing overhead applied toWork in Process was $73.000 The Corporation's Cost of Goods Sold wes $451000 prior to closing

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10 The actual manufacturing overhead incurred at Gutekunst Corporation during March was $53,000, while the manufacturing overheed applied to Work in Process was $73.000 The Corporation's Cost of Goods Sold wes $451000 prior to closing out its Manufacturing Ovemend account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true Multiple Choice $471000 Mango $401000 Manufacturing overhead $2000 oped by $20000 Ca of Good pled by $20.000 Cet of Goods Solda $20.000 ( Manufacturing head wanded by $20000 Com of Goods State o $475,000

10 The actual manufacturing overhead incurred at Gutekunst Corporation during March was $53,000, while the manufacturing overheed applied to Work in Process was $73.000 The Corporation's Cost of Goods Sold wes $451000 prior to closing out its Manufacturing Ovemend account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true Multiple Choice $471000 Mango $401000 Manufacturing overhead $2000 oped by $20000 Ca of Good pled by $20.000 Cet of Goods Solda $20.000 ( Manufacturing head wanded by $20000 Com of Goods State o $475,000

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter10: Accounting Systems For Manufacturing Operations

Section: Chapter Questions

Problem 10.4.1C

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Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What did the engineer mean about the large overhead rate being a disadvantage when plating bids and seeking new business?
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