Globe Manufacturing Company's Manufacturing Overhead account has a credit balance at the end of a period. What does this imply? No overhead has been applied during the year. Actual overhead costs were greater than overhead costs applied to jobs. Actual overhead costs were equal to overhead costs applied to jobs Actual overhead costs were less than overhead costs applied to jobs.

Globe Manufacturing Company's Manufacturing Overhead account has a credit balance at the end of a period. What does this imply? No overhead has been applied during the year. Actual overhead costs were greater than overhead costs applied to jobs. Actual overhead costs were equal to overhead costs applied to jobs Actual overhead costs were less than overhead costs applied to jobs.

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 18E: Housley Paints Co. had a remaining debit balance of $25,000 in its under- and overapplied factory...

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Phillips Products, Inc. had a remaining credit balance of $10,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts: Required: Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is not considered to be material. Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is considered to be material.
Nathan Industries had a remaining debit balance of $20,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts: Required: Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is not considered to be material. Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is considered to be material.
At the end of the fiscal year, there s a relatively minor balance in the factory overhead account. What procedure can be used for disposing of the balance in the account
Housley Paints Co. had a remaining debit balance of $25,000 in its under- and overapplied factory overhead account at year-end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year-end balances of these accounts, before adjustment, showed the following: Determine the prorated amount of the underapplied factory overhead that is chargeable to each of the accounts. Prepare the journal entry to close the debit balance in Under-and Overapplied Factory Overhead.
Nelson Fabrication Inc. had a remaining credit balance of $20,000 in its under- and overapplied factory overhead account at year-end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year-end balances of these accounts, before adjustment, showed the following: Determine the prorated amount of the overapplied factory overhead that is chargeable to each of the accounts. Prepare the journal entry to close the credit balance in Under-and Overapplied Factory Overhead.
Lavender Manufacturing Company began business in the current year. The company uses the simplified method to allocate mixed services costs to production. The companys costs and expenses for the year were as follows. a. Determine Lavenders total production costs for the year. b. Assume that the hourly pay for direct labor is much lower than the hourly pay for employees in general administration and that the employee turnover is much higher for production employees than for general administration employees. How should these facts affect the companys decision to use the simplified mixed services method to allocate mixed services costs to production?
If, at the end of the year, Manufacturing Overhead has been over applied, it means that: * actual overhead costs were greater than the overhead assigned to jobs. overhead has not been applied to jobs still in process. cost of goods will have to be increased by the amount of the over applied overhead. None of the above
If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the manufacturing overhead account at the end of any period means that: * A. more overhead cost has been charged to jobs than has been incurred during the period. B. the amount of overhead cost charged to jobs is greater than the estimated cost for the period. C. the amount of overhead cost charged to jobs is less than the estimated overhead cost for the period. D. more overhead cost has been incurred during the period than has been charged to jobs.
At the end of its current year, a company learned that its overhead was underapplied by $1,500 and that this amount is not considered material. Based on this information, the company should a. Credit the $1,500 to Finished Goods Inventory. b. Credit the $1,500 to Cost of Goods Sold. c. Debit the $1,500 to Cost of Goods Sold. d. Do nothing about the $1,500 because it is not material and it is likely that overhead will be overapplied by the same amount next year. e. Include the $1,500 on the income statement as “Other Expense.”
Smith Foundry in Columbus, Ohio, uses a predetermined manufacturing overhead rate to allocate overhead to individual jobs based on the machine hours required. At the beginning of the year, the company expected to incur the following: At the end of the year, the company had actually incurred the following: Requirements Compute Smith’s predetermined manufacturing overhead rate. How much manufacturing overhead was allocated to jobs during the year? How much manufacturing overhead was incurred during the year? Is manufacturing overhead underallocated or overallocated at the end of the year? By how much? Were the jobs overcosted or undercosted? By how much?
Mozart plc. uses direct labour cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company misclassified a portion of direct labour cost as indirect labour. What will the effect of this misclassification be?
Poulenc plc. uses direct labour cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company misclassified a portion of direct labour cost as indirect labour. The effect of this misclassification will be to: a) understate the predetermined overhead rate. b) have no effect on the predetermined overhead rate. c) cannot be determined from the information given. d) overstate the predetermined overhead rate.