Underapplied factory overhead would result if a. the plant were operating at less than normal capacity b. factory overhead costs incurred were less than costs charged to production c. factory overhead costs incurred were greater than costs charged to production d. factory overhead costs incurred were unreasonably large in relation to units produced

Underapplied factory overhead would result if a. the plant were operating at less than normal capacity b. factory overhead costs incurred were less than costs charged to production c. factory overhead costs incurred were greater than costs charged to production d. factory overhead costs incurred were unreasonably large in relation to units produced

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 1E: Classify each of the following items of factory overhead as either a fixed or a variable cost....

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Overapplied factory overhead would result if: a. The plant was operating at less than normal capacity b. Factory overhead costs incurred were less than costs charged to production c. Factory overhead costs incurred were unreasonably large in relation to units produced d. Factory overhead costs incurred were greater than costs charged to production
Overapplied overhead will result if A. the plant is operated at less than expected capacity. B. overhead costs incurred were greater than estimated overhead costs. C. overhead costs incurred were less than overhead costs charged to production. D. overhead costs incurred were greater than overhead charged to production.
Which of the following is not a reason to allocate overhead? Some overhead costs are seasonal and should be spread over production for the entire year. Unlike direct materials and direct labor, the amount of overhead actually incurred may not be known at the time a job is being worked on. Allocation is more accurate than tracing items directly to jobs. Manufacturing overhead is an indirect cost that cannot be physically or economically traced back to a specific item.
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
When the amount of overapplied factory overhead is significant, the entry to close overapplied Factory Overhead will most likely require: a. A debit to Cost of Goods Sold b. Credits to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory c. Debits to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory d. A credit to Cost of Goods Sold
Hoskins Co. uses a plant-wide factory overhead rate based on direct labor hours. Overhead costs would be overcharged to which of the following departments? A. A labor-intensive department B. A capital-intensive department C. A materials-intensive department D. None of the above
Underapplied factory overhead related to a significant decrease in production should be charged to a. Finished Goods Inventory b. Work in Process Inventory, Finished Goods Inventory, and Cost of Goods c. Work in Process Inventory and Finished Goods Inventory d. Cost of Goods Sold
If the activities that generate overhead costs vary between departments and products, adopting a plantwide manufacturing overhead rate would result in skewed product costs.True \sFalse
Assigning manufacturing overhead to a specific job is complicated by all of the below except: A) Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a particular job. B) Manufacturing overhead is incurred only to support some jobs. C) Manufacturing overhead consists of both variable and fixed costs. D) The average cost of actual fixed manufacturing overhead expenses will vary depending on how many units are produced in a period.
If the actual amount of manufacturing overhead cost incurred exceeds the amount applied, it indicates that the factory overhead account is which of the following? Group of answer choices Under-allocated and will have a debit balance Over-allocated and will have a debit balance Over-allocated and will have a credit balance Under-allocated and will have a credit balance
Determining the basis for applying manufacturing overhead costs involvesA. 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 produced.C. the determination of a measure of activity that is a causal factor in the incurrence of overhead cost.D. actual rather than budgeted levels of activity.
Traditional overhead allocations result in which of the following situations? a. Overhead costs are assigned as period costs to manufacturing operations. b. High-volume products are assigned too much overhead, while low-volume products are assigned too little overhead. c. Low-volume products are assigned too much overhead, while high-volume products are assigned too little overhead. d. The resulting allocations cannot be used for financial reports.