Provide two reasons why overhead might be underapplied in a given year.

Q: Explain why an overtime premium is included in manufacturing overhead.

A:

Q: Under a job order costing system, actual overhead costs are not fully known until the end of the…

A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

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: There must be a correlation between the activity and changes in the amount of overhead.   True /…

A: Correlation:-It refers to the statistical relationship between two variables or activities.…

Q: If overhead is applied to production on the basis of direct labor cost, what predetermined overhead…

A: Predetermined overhead rate = Estimated total manufacturing  overhead cost / Total direct labor cost

Q: determine the total manufacturing costs during the current year:

A: Total manufacturing costs is the total cost a company incurred on its manufacturing process to…

Q: How much of the factory labor cost for the year consisted of indirect labor?

A:

Q: rpose of the following control procedures (i.e., what threats is it designed to mitigate)? b.…

A: Following  are the Purpose of Control Procedures of Reconciliation of labor costs (based on job-time…

Q: ) what is the under-or-over allocated indirect production (overhead) costs? Discuss methods of…

A: Overhead means the all indirect expenses which were incurred in the manufacturing the product or…

Q: 5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or…

A:

Q: Why are flexible overhead budgets based on activity measures, such as hours of process time, machine…

A: A budget that provides information relating to the estimated or budgeted overhead expenses and that…

Q: Which method of determined operating income is used internally for decision making and considers…

A: Variable costing method / Contribution margin income statement method of determined operating income…

Q: The predetermined overhead rate is calculated: a. at the end of the period b. changed regularly…

A: The overhead rate is pre determined because the costing department cannot compute exactly the amount…

Q: How should managers adjust for under-or overallocated manufacturing overhead costs at the end of the…

A: Manufacturing overhead means all indirect costs related to manufacturing of goods like indirect…

Q: What is underapplied overhead? Overapplied overhead? What disposition is made of these amounts at…

A: Over-applied manufacturing overhead: If the manufacturing overhead cost in the work process is more…

Q: Explain two available treatments for disposing of overhead cost variances at the end of a period.

A: If the standard cost system is utilized, then the variance associated to overhead cost should be…

Q: Give examples of substantive proceduresin the production cycle and relate themto assertions about…

A: Substantive Procedures are an activities performed by an auditor to detect and disclose any kind of…

Q: Underapplied overheard exists when the amount of overhead applied to jobs during the period is ?

A: Manufacturing overhead costs: The costs, which do not relate directly with the manufacturing of…

Q: At the end of the accounting period manufacturing overhead will be either over- applied or under-…

A: At the beginning of the period, the entities determine a pre-determined rate using the estimated…

Q: What is the journal entry to record the labor costs incurred during the year?

A: Process Costing:   Process costing is a method of cost accounting, which is used when the production…

Q: True or False. The predetermined overhead rate is an amount obtained by dividing the total overhead…

A: Manufacturing Overhead: Manufacturing overhead is also known as Indirect Cost to the product cost.…

Q: Briefly describe two ways of closing out overapplied or underapplied overhead at the end of an…

A:

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: Based upon the above information, the manufacturing costs incurred during the year were?

A: Manufacturing overheads: Manufacturing overheads refers to the indirect factory- a related cost that…

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: 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: The predetermined overhead rate is calculated: a. at the end of the period b. changed regularly…

A: Predetermined overhead rate is the estimated rate by using which overhead costs needs to be applied.…

Q: Would you expect the amount of applied overhead for a period to equal the actual overhead costs of…

A: Actual overhead: The actually occurred indirect manufacturing cost is called actual overhead.…

Q: If a company fully allocates all of its overhead costs to jobs, does this guarantee that a profit…

A: Overhead cost: Overhead cost is the indirect expense in a business. It does not directly involve…

Q: Explain the phrase, "Fixed Overhead Expenditure (or Spending or Budget) Variance: This variance…

A: Solution:- Explaining the concept of Fixed Overhead Expenditure or Spending variance as follows…

Q: Is is true that when a blanket rate is used, this means that a single rate is used to allocate…

A: Following is the answer to the given question

Q: Eberle Ltd. uses direct labour cost as a basis for computing its predetermined overhead rate. In…

A: Predetermined Overhead rate when calculated based on labor cost is determined as :-   O/H rate =…

Q: Which one of the following is the right formula to calculate the predetermined overhead rate? Select…

A: Unit-level product costing is used to allocate the manufacturing costs to each product. It is…

Q: The variable overhead spending variance is most effective in measuring: O how well overhead spending…

A: The variable overhead, also known as the variable spending variance, is the difference between the…

Q: The equivalent units for the FIFO unit cost represent: a. work done during the current period. b.…

A: Equivalent units of products concept came in to existence when some units are not fully completed at…

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: At the end of a period, what balance should remain in the Factory Overhead account?

A:

Q: /hich of the following statements is true regarding a predetermined overhead rate based on capacity?…

A: Solution: Predetermined overhead rate based on capacity "Is usually lower than a Predetermined…

Q: Over-allocation of manufacturing overhead would require which of the following year-end adjustments?

A: Adjusting entries are the year-end or reporting end adjustments which are passed for the fair…

Q: what is the interpretation of full-time equivalents (FTEs) when calculating number of total…

A: FTE is a measurement unit which is used to compare different workloads of employees i.e Part time…

Q: Help question 37

A: False. Labor efficiency variance measures the difference between the Actual labor hours worked and…

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.