Question 39? QUESTION 39Overapplied manufacturing overhead would result if:the plant was operated at less than normal capacity.manufacturing overhead costs incurred were greater thanmanufacturing overhead costs charged to production.O manufacturing overhead costs incurred were less than estimatedmanufacturing overhead costs.manufacturing overhead costs incurred were less thanmanufacturing overhead costs charged to production.

Over(under)applied manufacturing overhead occurs due to the difference in the actual manufacturing…

Overapplied manufacturing overhead would result if: the plant was operated at less than normal capacity. manufacturing overhead costs incurred were greater than manufacturing overhead costs charged to production. manufacturing overhead costs incurred were less than estimated manufacturing overhead costs. manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production.

Overapplied manufacturing overhead would result if: the plant was operated at less than normal capacity. manufacturing overhead costs incurred were greater than manufacturing overhead costs charged to production. manufacturing overhead costs incurred were less than estimated manufacturing overhead costs. manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production.

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 4DQ: Under what two conditions would the multiple production department factory overhead rate method...

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Under what two conditions would the multiple production department factory overhead rate method provide more accurate product costs than the single plantwide factory overhead rate method?
Under what two conditions would the multiple production department factory overhead rate method provide more accurate product costs than the single plantwide factory overhead rate method?
(Appendix 3A) Scattergraph, High-Low Method, Method of Least Squares, Use of Judgment The management of Wheeler Company has decided to develop cost formulas for its major overhead activities. Wheeler uses a highly automated manufacturing process, and power costs are a significant manufacturing cost. Cost analysts have decided that power costs are mixed. The costs must be broken into their fixed and variable elements so that the cost behavior of the power usage activity can be properly described. Machine hours have been selected as the activity driver for power costs. The following data for the past 8 quarters have been collected: Note: For the following requirements, round the fixed cost to the nearest dollar, round the variable rates to three decimal places, and the R2 to two decimal places. Required: 1. Prepare a scattergraph by plotting power costs against machine hours. Does the scatter-graph show a linear relationship between machine hours and power cost? 2. Using the high and low points (i.e., the high-low method), compute a power cost formula. (Note: Round answers to three decimal places.) 3. Use the method of least squares to compute a power cost formula. Evaluate the coefficient of determination. 4. CONCEPTUAL CONNECTION Rerun the regression, and drop the point (20,000, 26,000) as an outlier. Compare the results from this regression to those for the regression in Requirement 3. Which is better?
Under what conditions might a company use activity-based costing to allocate factory overhead to products?
23. Overapplied overhead would result if a• The plant is operated at less than normal capacity. b• Overhead cost incurred were less than costs charged to production. c• Overhead costs incurred were reasonably small in relation to units produced. d• Overhead costs incurred were greater than costs charged to production.
33. Underapplied factory overhead results when a• A plant is operated at less than its normal capacity. b• Factory overhead costs incurred are greater than the costs charged to production. c• Factory overhead costs incurred is less than the costs charged to production. d• Factory overhead costs incurred are unreasonably large in relation to the number of units produced
QUESTION 22 Costs that are not related to any specific product, batch, or unit of production are referred to as facility-level costs. True False
QUESTION 9 Using a plant-wide factory overhead rate distorts product costs when: A. products require different ratios of allocation-base usage in each production department B. significant differences exist in the factory overhead rates used across different production departments C. both A and B exist D. either A or B exist
25 Identify the false statement from the following: a. All of these b. Overheads are assigned to activities or grouped into cost pools after they are charged to cost objects c. The target cost is the minimum cost that is allowable in the production, distribution, and disposal of the product d. Target costing tracks and accumulates costs and revenues attributable to each product over the entire product
29. Traditionally indirect cost like overheads were distributed to end products on the assumption that the product ______ a. Consumes resources as per the life cycle costing b. Consumes resources in proportion to the production volume c. All of the options d. Consumes resources as per the activities and cost drivers
Question 13All costs related to the manufacturing function in a company are:A. Prime costB. Conversion costC. Direct costD. Product cost Question 14In job-order cost system, the use of direct materials previously purchased usually is recorded as an increase in:A. Material accountB. Factor overhead appliedC. Factor overhead accountD. Work-in-process account Question 15The wages of factory janitorial staff should be classified as: A. Period costB. Factory overhead costC. Prime costD. Direct labor cost
29. All indirect expenditure incurred from the time the product is completed until it reaches its destination are called_____________. a. Selling Overhead b. Production Overhead c. Distribution Overhead d. Office Overhead