A normal cost system applies overhead cost to jobs by multiplying:Multiple ChoiceAn actual overhead rate by the estimated amount of the allocation base used by the jobs.A predetermined overhead rate by the estimated amount of the allocation base used by the jobs.An actual overhead rate by the actual amount of the allocation base used by the jobs.A predetermined overhead rate by the actual amount of the allocation base used by the jobs.

Applied overhead = Predetermined overhead rate x Actual DLH

Answered: A normal cost system applies overhead…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Compute predeterminedoverhead rates and explainwhy estimated overhead costs(r ather than actual overheadcosts) are used in the costingprocess.
What is the difference between a Job Order Cost System and a Process Cost System? Give an example of a product made under each system.
How do you calculate the predetermined overhead rate do you have an example
An overhead absorption rate based on direct labour cost is known as the: A. Direct labour hour rate B. Direct labour cost percentage rate C. Direct labour mix rate D. Direct labour optimum rate Reset Selection
A job order cost system identifies costs with a particular job rather than with a set time period. True False
Which of the following statements are true? I. In a job-order costing system, indirect labor is assigned to a job using information from the employee time ticket. II. If the allocation base in the predetermined overhead rate does not drive overhead costs, it will nevertheless provide reasonably accurate unit product costs because of the averaging process. III. In a job-order costing system, costs are traced to individual units of product. The sum total of such traced costs is called the unit product cost. Multiple Choice Only statement I is true. Statements I and II are true. Statements II and III are true. None of the statements are true.
QUESTION 9 Put the following steps in an Activity-Based-Costing system in the proper order. v Calculate a predetermined overhead rate. Identify a logical cost driver as an allocation base for each cost pool. Allocate the costs to the cost object by multiplying the predetermined overhead rate by the actual amount of the cost driver used by the cost object. v Separate total overhead into cost pools.
Please explain:: What is the purpose of an overhead rate What are the steps to apply the overhead cost to a product What does it represent when the overhead cost for over-applied
Indicate whether the following statement is true or false, then support your view. By using a single cost pool and a single cost driver to allocate overhead, the more traditional methods of overhead assignment fully considers the influence on cost of the different activities that occur to make a product.
When used as the denominator in the calculation of an overhead rate, which of the following will cause the least amount of overhead to be applied? a. Theoretical activity level b. Expected activity level c. Practical activity level d. Normal activity level
! Required information Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Machining Designing costs Setup costs Total Cost of Pool Number of machine hours Number of design hours. Number of batches. Cost Driver $416,700 Number of machine hours 93,100 Number of design hours 73,338 Number of batches Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Estimated Cost Driver 92,600 9,500 510 Product A Product B Product C 36,000 46,000 10,600 3,800 2,100 3,600 285 50 175
Explain how overhead is assigned to production when a predetermined overhead rate is used?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS