10- A company debits overhead applied account, debits cost of goods sold account and credits overhead costs account. Why? O This is a wrong entry. The company closes the applied accounts with the relevant cost account while selling a product. The company is accounting for the normal capacity variance while closing the applied and cost accounts. The company is adjusting the cost of goods sold account due to a damage in the production process.

10- A company debits overhead applied account, debits cost of goods sold account and credits overhead costs account. Why? O This is a wrong entry. The company closes the applied accounts with the relevant cost account while selling a product. The company is accounting for the normal capacity variance while closing the applied and cost accounts. The company is adjusting the cost of goods sold account due to a damage in the production process.

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Description: 10- A company debits overhead applied account, debits cost of goods soldaccount and credits overhead costs account. Why?This is a wrong entry.The company closes the applied accounts with the relevant cost account while sellinga product.The company i

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following would not be considered a cost ofquality?a. Lost sales due to bad publicity generated by productfailures.b. The cost of repairing merchandise that was dropped bya forklift in the factory.c. The amount of a bonus paid to the work team producingthe fewest defective units.d. The cost of the external audit.
Which of the following statements is false? (You may select more than one answer.)a. In recent years, most companies have experienced increasing manufacturing overhead costs in relation to direct labor costs.b. Activity-based costing systems may use direct labor-hours and/or machine-hoursto assign unit-level costs to products.c. Facility-level costs are not caused by particular products.d. Product-level costs are larger for high-volume products than for low-volumeproducts.
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Which of the following statements is incorrect? O A. If MOH is overallocated to a job that has been sold, and the company calculates sales price by marking up job costs, the job will likely be underpriced. O B. The formula to arrive at the POHR is total budgeted manufacturing overhead divided by total estimated allocation base. O C. To calculate the increase to WIP for allocated MOH costs, the POHR is multiplied by the actual amount of the allocation based used by the cost object. D. "Number of units" is typically not an appropriate allocation base for MOH because the company's products do not consume equal overhead resources. If the over/underallocated MOH is fairly large and the majority of the units have not been sold, the balance in MOH should be prorated between WIP, FG, and COGS. O E.
2. Answer the Bot Please. Using a predetermined overhead rate, an appropriate amount of factory overhead should be added to a job cost sheet. Select one: True False Operating expenses that are incurred for the benefit of the business as a whole and that cannot be traced directly to any specific department are known as nonallocated expenses. Select one: True False The difference between a department's gross profit and its operating expenses is known as the departmental direct operating profit. Select one: True False
During the production process, company incurred normal spoilage and abnormal loss. Such losses are added to _______________________. a. Cost of goods sold b. Production cost c. Process cost d. Finished goods Clear my choice
For ABC Company, the most common treatment of under- or overapplied factory overhead is to close it to; a.Work in process. b.Cost of goods sold. c.Finished goods. d.Retained Earnings
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Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work- in-Process Inventory Finished Goods Inventoryand Cost of Goods Sold? a Cost of Goods Sold will be lower if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. The balance in the Work-in Process account after allocation will be the same under either method None of given answer is correct. d Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be lower if the underapplied overhead is closed out by allocating it to all appropriate accounts.
r the amount of "Cost of goods manufactured" during a period exceeds the amount of "Total manufacturing costs" for the period, the ending work in process inventory is greater than or equal to the amount of the beginning work in process inventory. ending work in process is equal to the cost of goods manufactured. ending work in process is less than the amount of the beginning work in process inventory. ending work in process is greater than the amount of the beginning work in process inventory.