At the end of the year, overhead applied was $3,733,000. Actual overhead was $3,156,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to Oa. increase by $1.154.000 Ob. decrease by $577,000 Oc. decrease by $1.154,000 Od. increase by $577,000

At the end of the year, overhead applied was $3,733,000. Actual overhead was $3,156,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to Oa. increase by $1.154.000 Ob. decrease by $577,000 Oc. decrease by $1.154,000 Od. increase by $577,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: company's net operating income for the year would be:

A: The Variable costing is a cost accounting method which includes only variable costs for producing…

Q: Assume the following information for a company that produced 10,000 units and sold 8,000 units…

A: Variable cost per unit remains constant per unit. Fixed cost is constant in total. Contribution…

Q: business operated at 100% of capacity during its first month and incurred the following costs:…

A: Introduction: To keep track of all costs associated with creating a certain product, "absorption…

Q: Complete (assume $100,000 of overhead to be distributed): (Round your "Ratios" answers to the…

A: Given, Total estimated overhead = $100,000 Square feet of Department A = 25,000 Square feet of…

Q: 2. A company had an under recovery of overheads of $200,000 with a budgeted overhead of $1,000,000.…

A: The objective of the question is to calculate the actual overhead cost of a company given the under…

Q: The level of inventory of a manufactured product has increased by 7,616 units during a period. The…

A: Decrease in operating income if variable costing is used = Increase in level of inventory x fixed…

Q: The level of inventory of a manufactured product has increased by 7,819 units during a period. The…

A: Variable costing and absorption costing To calculate operating income two different methods used are…

Q: During the current period, 14,000 units were produced and 12,000 units were sold. Fixed…

A: Under absorption costing, the fixed costs are also treated only for the goods that are sold during…

Q: The accounting records for Portland Products report the following manufacturing costs for the past…

A: In This Numerical Has Covered the concept of Cost Analysis.

Q: A business operated at 100% of capacity during its first month and incurred the following costs:…

A: Introduction: Total cost is an accounting measure. It includes not only the actual monetary spend…

Q: During Heaton Company's first two years of operations, it reported absorption costing net operating…

A: Solution 1Computation of Unit Product cost - Heaton CompanyParticularsYear 1Year 2Direct…

Q: Whirly Corporation's contribution format income statement for the most recent month is shown below:…

A: CVP Analysis is a termed as Cost Volume Profit Analysis. Under this technique operating income…

Q: Production costs (18,900 units): Direct materials Direct labor $171,300 235,500 247,300 93,300…

A: Using absorption Costing, all fixed and variable manufacturing costs are included in the product…

Q: ABC Company’s operating income was P900,000 under absorption costing and P850,000 under variable…

A: Ending inventory units = Difference in operating income / Fixed overhead per unit

Q: The level of inventory of a manufactured product has increased by 8,366 units during a period. The…

A: The objective of the question is to determine the effect on operating income if variable costing is…

Q: A company’s net operating income is $85,500 using marginal costing and $90,000 using absorption…

A: Profit under absorption costing is higher as compare to profit under variable costing , it means…

Q: During Heaton Company's first two years of operations, it reported absorption costing net operating…

A: ABSORPTION COSTINGAbsorption Costing is a Cost Management Accounting method in which all costs…

Q: The level of inventory of a manufactured product has increased by 8,413 units during a period. The…

A: Variable costing is one of the cost allocation methods that is used by a company to allocate costs…

Q: 2010 11,500 P 18 2009 Units produced Overhead applied per unit Actual overhead 10,000 P 15 55,000…

A: The overhead rate is calculated as estimated overhead cost divided by estimated base activity. The…

Q: How much will operating profits increase if Jasmine accepts the

A: While deciding whether to accept an order or not, fixed costs are ignored as they are to be incurred…

Q: A company has $45,000 of net income using absorption costing. Its beginning inventory contained…

A: Fixed overhead is not incorporated in the inventory value in variable costing. Absorption costing,…

Q: The accounting records of ABC Corp shows the following: Increase of RM if 45,000; decrease din FG…

A: Solution: Cost of raw materials used during the period = Purchases of raw materials + Transportation…

Q: The level of inventory of a manufactured product has increased by 7,147 units during a period. The…

A: Absorption Costing: The approach of management accounting known as "absorption costing," which is…

Q: absorption costing

A: The operating income under absorption costing will be lower by the increase in units of inventory…

Q: A business operated at 100% of capacity during its first month and incurred the following costs:…

A: Absorption costing: Absorption costing is also called traditional costing. This method of costing…

Q: 2. A company had an under recovery of overheads of $200,000 with a budgeted overhead of $1,000,000.…

A: The objective of the question is to calculate the actual overhead cost of a company given the under…

Q: At the end of the year, overhead applied was $35,000,000. Actual overhead was $34,300,000. Closing…

A: Applied Overhead is the overhead initially applied to goods produced. The cost allocation base…

Q: The level of inventory of a manufactured product has increased by 9,022 units during a period. The…

A: The objective of the question is to determine the effect on operating income if absorption costing…

Q: A factory incurred the following expenditure during the year ended 31 May 2016:Sh.Direct material…

A: A management report is a comprehensive document prepared by professionals within an organization to…

Q: The following information relates to the Jasmine Company for the upcoming year, based on 424,000…

A: Jasmine Company's current financial data for the upcoming year, based on 424,000 units, shows sales…

Q: Complete (assume $50,000 of overhead to be distributed): (Round your "Ratio"answers to the nearest…

A: Overhead refers to the costs or expenses involved in the production of goods but such costs cannot…

Q: Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the…

A: The variable costing method is a method where only variable costs are taken into consideration…

Q: If fixed costs are $234,000, the unit selling price is $123, and the unit variable costs are $80,…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: The level of inventory of a manufactured product has increased by 5,000 units during a period. The…

A: Variable costing and absorption costingTo calculate operating income two different methods used are…

Q: During Heaton Company's first two years of operations, it reported absorption costing net operating…

A: Under Variable Costing, only variable manufacturing costs i.e. expenses that change depending on the…

Q: Zeta Inc. had net income of $918,000 based on variable costing. Beginning and ending inventories…

A: Net income as per absorption costing: =Net income under variable costing-(Beginning Inventory-…

Q: Assume the following information for a company that produced 10,000 units and sold 9,000 units…

A: Variable costing: It implies to a costing method whereby only variable expenses are assigned or…

Q: XYZ Company uses normal costing. Following are various cost and inventory data for the just…

A: 1) Cost of goods sold = Prime Cost +Opening WIP Inventory - Closing WIP Inventory + Opening Finished…

Q: nd Use Ovrehead Rate During the coming accounting year, Baker Manufacturing, Inc.…

A: The predetermined overhead rate refers to the concept of computing the estimated value achieved by…

Q: Use the information in the following table to compute each department's contribution to overhead…

A: Overhead: Overhead refers to the business expenses which are not directly related to the production…

Q: During Heaton Company's first two years of operations, It reported absorption costing net operating…

A: The income statement can be prepared using various methods as variable costing and absorption…

Q: The company produced 21,000 units, and sold 15,500 units, leaving 5,500 units in inventory at…

A: A variable costing system refers to the costing system in which manufacturing cost is computed after…

Q: Consider the following information for Presidio Inc.'s most recent year of operations. Number of…

A: Under Full Absorption Income Statement , Gross Profit = Sales - Cost of goods sold Net Operating…

Q: The accounting records of X Corp shows the following: Increase of RM if 45,000; decrease din FG…

A: Solution: Cost of raw materials used = Purchase of raw materials + Transportation In - Increase in…

Q: At the end of the accounting period Tubman, Inc. reports operating income of $50,000, a contribution…

A: Under the variable costing, fixed costs are taken as period costs and taken as a whole amount.…

Q: accounting records for Portland Products report the following manufacturing costs for the past year.…

A: Answer : 1. Volume level 136000 units : Particular Total cost Direct material $374,400…

Question

At the end of the year, overhead applied was $3,733,000. Actual overhead was $3,156,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to
Oa. increase by $1.154.000
Ob. decrease by $577,000
Oc. decrease by $1,154,000
Od. increase by $577,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A company expected its annual overhead costs to be $813200 and machine hours to equal 107000 hours. Actual overhead was $749000, and actual machine hours totalled 98000 hours. How much overhead was over or underapplied? $4200 underapplied O $68400 underapplied O $69000 over-applied O $64400 underapplied
Panta Corp had net income of P226,000 based on variable costing. Beginning and ending inventories were 7,400 units and 12,800 units, respectively. Assume the fixed overhead per unit was P5 for both the beginning and ending inventory. What is net income under absorption costing?
From the following information, compute percent change in operating income for the current year. Sales for the previous year $210,000 Contribution margin 181,000 Fixed costs 125,000 Operating income 36,000 Assume that sales for the current year increased by 17%. a.86% b.92% c.74% d.96%
Records at Hal's Accounting Services show the following costs for year 1. Direct materials and supplies Employee costs Total overhead $ 40,000 2,900,000 1,300,000 Production was 25,000 billable hours. Fixed overhead was $700,000. Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 5 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected to increase by 5 percent. Required: a. Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? b. Determine the total costs per billable hour for year 1 and year 2.
Whirly Corporation's contribution format income statement for the most recent month is shown below: Per Unit $31.00 18.00 $ 13.00 Sales (8,600 units) Variable expenses Contribution, margin Fixed expenses Net operating income Total $ 266,600 154,800 111,800 Required: (Consider each case independently): 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income 56,000 $ 55,800 1. What would be the revised net operating income per month if the sales volume increases by 90 units? 2. What would be the revised net operating income per month if the sales volume decreases by 90 units? 3. What would be the revised net operating income per month if the sales volume is.7,600 units?
Garrett Company provided the following information: Common fixed cost totaled $46,000. Garrett allocates common fixed cost to Product 1and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true?a. Sales will increase by $300,000.b. Overall operating income will increase by $2,600.c. Overall operating income will decrease by $25,000.d. Overall operating income will not change.e. Common fixed cost will decrease by $27,600.
The manufacturing costs of Calico Industries for three months of the year are provided below: Total Cost Production (units) Аpril $116,100 281,600 May 90,500 164,900 June 108,300 242,000 Using the high-low method, the variable cost per unit and the total fixed costs are Oa. $2.20 per unit and $5,415 Ob. $0.40 per unit and $27,074 Oc. $3.96 per unit and $5,415 Od. $0.22 per unit and $54,148
Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to determine Smithson's fixed costs per month. Do not round your intermediate calculations. Cost Machine Hours January $52,200 February 75,000 March 57,000 April 64,000 a. $2,530 Ob. $1,533 c. $22,800 Od. $50,600 20,000 29,000 22,000 24,500
Records at Hal’s Accounting Services show the following costs for year 1. Direct materials and supplies $ 40,000 Employee costs 2,900,000 Total overhead 1,300,000 Production was 25,000 billable hours. Fixed overhead was $700,000. Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 5 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected to increase by 5 percent. b. Determine the total costs per billable hour for year 1 and year 2.
The level of inventory of a manufactured product has increased by 7,859 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $11.00 $8.00 Unit operating expenses of the period 4.00 2.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $78,590 increase Ob. $62,872 increase Oc. $78,590 decrease Od. $62,872 decrease
The normal capacity of an entity is 350 000 units per annum. The raw material cost is R220 per unit and direct labour is R250 per unit. 9. Variable production overheads are R60 per unit and fixed production overheads incurred amounts to R5 250 000. The closing balance of finished goods is 9 500 units (assume there is no opening balance). Which amount is the correct cost of sales figure if the actual production was 280 000 units for the year? 1. R145 000 000 2. R146 500 000 3. R147 422 500 4. R148 472 500
Whipple Company has sales revenue of $585,000. Cost of goods sold before adjustment is $335,000. The company uses machine hours to allocate manufacturing overhead and estimated 10,450 machine hours would be used during the year. For the year, manufacturing overhead was under-allocated by $13,400. The company's actual manufacturing overhead is $91,000. What is the actual gross profit? Select one: a. $250,000 b. $159,000 c. $236,600 d. $104,400 e. $263,400