If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate, then manufacturing overhead must have been under-allocated. Select one: True False

If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate, then manufacturing overhead must have been under-allocated. Select one: True False

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: The definition of the cost is the collection of cost data in some organized way by means of an…

A: Cost is amount of cost incurred

Q: Multiple choice question. total fixed manufacturing overhead cost total manufacturing overhead…

A: The total manufacturing costs of the product or job include variable and fixed cost. The variable…

Q: There must be a correlation between the activity and changes in the amount of overhead. True /…

A: Correlation:-It refers to the statistical relationship between two variables or activities.…

Q: the following statements about predetermined overhead rates are correct, EXCEPT: O a. based on…

A: Overhead are those expenses of the entity/firm which it made after getting the prime cost of the…

Q: true of false: A collection of costs to be assigned is called a cost pool.

A: Activity based Costing system is a method which is used to calculate total amount of Cost by…

Q: A cost driver is a factor, such as machine-hours, that is used to allocate direct costs to a…

A: Direct costs:Direct cost is simply a cost or price that can directly related to the production of…

Q: the allocation base for applying overhead product the allocation base for applying overhead product…

A: The concept of activity-based costing requires identifying the cost pool, cost driver, number of…

Q: True False

A: Overhead allocation involves distributing indirect production costs to products or services based on…

Q: When actual overhead costs exceed overhead applied, overhead is said to be underapplied. TRUE FALSE

A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

Q: What adjustment is made for underapplied overhead on the schedule of CoGS? What adjustment is made…

A: Underapplied overhead is added to cost of goods sold thus increases the total cost of goods sold.

Q: Which of the

A: A prime cost is the total direct costs of production, including raw materials and labor.. Indirect…

Q: The high-low method used in determining costs can be used to estimate the cost queation using just…

Q: An overhead absorption rate based on direct labour cost is known as the: A. Direct labour hour rate…

A: Overhead absorption meaning:- The quantity of indirect costs ascribed to cost items is refereed to…

Q: not easily traceable and are allocated to a cost object u not abbreviate or add any extra spacing in…

A: Direct costs refer to those expenses which can be directly related to a product or a service.

Q: Overhead costs are overapplied if the amount applied to Work in Process is: a. equal to actual…

A: The correct answer is Option b. Less than actual overhead incurred.

Q: possible for units in the beginning Work-in-Process Inventory to also be part of the ending…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Question

Select one:

True

False

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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

How is Standard qty in fixed overhead applied to work in process 36000?
If overhead applied is less than actual overhead, it is:
! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 105,000 units of each product. Its unit costs for each product at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Cost per unit Alpha $30 23 10 19 15 18 $115 Beta $18 16 8 21 11 13 $87 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.
Which of the following is not a method of cost absorption? (a) Percentage of direct material cost (b) Machine hour rate (c) Labour hour rate (d) Repeated distribution method
If the actual overhead costs incurred are in excess of the applied overhead costs, the difference is called what? a) Predetermined overhead rate b) Underapplied overhead c) Overapplied overhead d) Gross margin
When materials are used as indirect materials, their cost is debited to Facotry or Manufacturing overhead account. TRUE FALSE
f) ‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less the normal loss is the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.
Which of the following is most likely to be true of the manufacturing overhead costs assigned to a product with relatively low volume and high complexity? O a. An ABC system will assign the same manufacturing overhead costs to the product as a volume- based system. O b. Avolume-based system will assign more manufacturing overhead costs to the product than an ABC system. O c. An ABC system will assign more manufacturing overhead costs to the product than a volume-based system. O d. An ABC system will assign manufacturing overhead costs to the product, while a volume-based system will not. e to search W 11:35 A D A dx ENG 22-05-2021 hp 141 brt se delete home end 96 - backspace num ask lock T 7V 8A 94 home Dg up K enter 5 0 pause ↑ shift 11 end alt ctrl SUt
Can you give us the actual formula for determining the overhead rate and not just the two components without relating them to each other, please? That should then help you give a better explanation of how/why the overhead could be over or underapplied.
[S1] A cost is either direct or indirect. The classification changes if the costs object changes. [S2] Manufacturing overhead is an indirect cost with respect to units of product. a. both are trueb. both are falsec. S1 is trued. S2 is true
Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare thenecessary journal entry.
Since overhead costs are indirect costs, Group of answer choices they require some process of allocation. they can be easily traced to production. they cannot be allocated. a predetermined overhead rate is not advantageous.