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Multiple Choice Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job. Using multiple predetermined overhead rates rather than a single predetermined plant-wide overhead rate improves the job cost accurancy. When estimated activity used for overheod application is less than the level of activity at capacity, the use of capacity-based overhead rate decreases net operating income due to the cost of idle capacity. If a job is not completed at the end of the period, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used. Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to Jobs,

Multiple Choice Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job. Using multiple predetermined overhead rates rather than a single predetermined plant-wide overhead rate improves the job cost accurancy. When estimated activity used for overheod application is less than the level of activity at capacity, the use of capacity-based overhead rate decreases net operating income due to the cost of idle capacity. If a job is not completed at the end of the period, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used. Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to Jobs,

FINANCIAL ACCOUNTING
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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(First image ) Which is correct?

Multiple Cholce Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job. Using multiple predetermined overhead rates rather than a single predetermined plant-wide overhead rate Improves the job cost accurancy. When estimated activity used for overhead application is less than the level of activity at capacity, the use of capacity-based overhead rate decreases net operating income due to the cost of idle capacity. If a job is not completed at the end of the period, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used. Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.
Transcribed Image Text:Multiple Cholce Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job. Using multiple predetermined overhead rates rather than a single predetermined plant-wide overhead rate Improves the job cost accurancy. When estimated activity used for overhead application is less than the level of activity at capacity, the use of capacity-based overhead rate decreases net operating income due to the cost of idle capacity. If a job is not completed at the end of the period, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used. Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.
Which is false? Multiple Cholce A variable manufacturing cost per unit remains constant within the relevant range. Opportunity costs should be considered when making decisions. Sunk costs should be ignored when comparing differential costs between alternatives. Common costs cannot be traced to cost objects individually. Differential costs are variable costs. A company's income statement is as follows: Revenues Cost of Goods Sold Gross Margin Selling Expenses Administrative Expenses Net Operating Income (NOI) $8,570,000 5,800,000 2,770,000 1,260,000 850,000 660,000 Q. The company's margin of safety is $1,650,000. If the company's target NOI is $780,000, how much revenues would the company need to earn? ANS. $
Transcribed Image Text:Which is false? Multiple Cholce A variable manufacturing cost per unit remains constant within the relevant range. Opportunity costs should be considered when making decisions. Sunk costs should be ignored when comparing differential costs between alternatives. Common costs cannot be traced to cost objects individually. Differential costs are variable costs. A company's income statement is as follows: Revenues Cost of Goods Sold Gross Margin Selling Expenses Administrative Expenses Net Operating Income (NOI) $8,570,000 5,800,000 2,770,000 1,260,000 850,000 660,000 Q. The company's margin of safety is $1,650,000. If the company's target NOI is $780,000, how much revenues would the company need to earn? ANS. $
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