(a)
(1)
Predetermined overhead
To state: the meaning of over applied factory overhead.
(b)
To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.
(c)
To state: the reporting of credit balance of factory overhead in interim
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Chapter 16 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 14th + Working Papers For Warren/reeve/duchac's Corporate Financial Accounting, 14th + ... Financial & Managerial Accounting,
- If the factory overhead control account has a credit balance of 2,000 at the end of the first month of the fiscal year, has the overhead been under- or overapplied for the month? What are some probable causes for the credit balance?arrow_forwardAt 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 accountarrow_forward1. Which of the following is not a component of factory overhead? a. Payroll taxes share of the employer b. Payroll taxes share of the employee-laborer c. Indirect labor d. Supervision 2. Which of the following is not a component of factory overhead? Utilities expense b. Depreciation expense c. Accumulated depreciation d. Food purchases by cafeteria service department a. 3. Which of the following is part of a regular year-end adjustment to factory overhead? a. Indirect materials b. Factory supplies c. Loss from reprocessing defective units. d. Deprecation 4. What account is credited at year-end adjusting entry for insurance premiums under the so-called "asset method" of accounting? а. Cash b. Prepaid Insurance c. Factory Overhead Control d. Applied Factory Overhead 5. What account is debited at year-end adjusting entry for insurance premiums under the so-called "expense method" of accounting? a. Applied Factory Overhead b, Factory Overhead Control c. Prepaid Insurance d. Insurance…arrow_forward
- The predetermined manufacturing overhead rate is usually computed: Select one: A. During the financial year B. When overheads have been incurred C. At the beginning of the financial year D. At the end of the financial yeararrow_forwardIs manufacturing overhead underapplied or overapplied for the year? By how much? What is the cost of goods available for sale during the year? (Show complete calculations) What is the journal entry to record the cost of goods sold referred to above? What is the ending balance in Finished Goods? (Show T-Account) Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year? What is the gross margin for the year? What is the net operating income for the year?arrow_forward1. Determine whether overhead was under- or overapplied during the year in the Assembly Department. 2. If the company disposes of under- or overapplied overhead as an adjustment to Cost of Goods Sold, would the company’s Cost of Goods Sold account increase or decrease?arrow_forward
- How should managers adjust for under-or overallocated manufacturing overhead costs at the end of the accounting year?arrow_forwardUsing the attached Prepare an income statement for the year. The company closes any underallocated or overallocated overhead to Cost of Goods Sold.arrow_forwardWhen is the predetermined overhead rate usually calculated? A. At the end of the year. B. Anytime. C. At the beginning of the year. D. At the end of each month.arrow_forward
- Please assist with the remaining questions: e) What is the balance in the Cost of Goods Sold account after the adjustment? f) Compute Elite's gross profit earned on the jobs sold, after adjusting for the manufacturing overhead variance. g) Post the appropriate entries to Work in Process Inventory account and determine the account balance on March 31 (end of the quarter).arrow_forwardChristopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2018 follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $15,300 6,900 20,800 The following transactions occurred during January: (a) Purchased materials on account for $26,800. (b) Issued materials to production totaling $20,800, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $16,300 were recorded as follows: $11,100 for assembly workers 2,000 for factory supervision 1,700 for administrative personnel 1,500 for sales commissions (d) Recorded depreciation: $4,000 for factory machines, $500 for the copier used in the admidistrative office. (e) Recorded $1,100 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f)…arrow_forwardQ2. Categorize each of the following activities into the expenditure, conversion, or revenue cycles, and identify the applicable subsystem. a. Preparing the weekly payroll for manufacturing personnel b. Releasing raw materials for use in the manufacturing cycle c. Recording the receipt of payment for goods sold d. Recording the order placed by a customer e. Ordering raw materials f. Determining the amount of raw materials to order?arrow_forward
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