Required 1 Required 2 Required 3Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used aplantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates?

Various departments within a certain firm will consume the overhead resources in different…

Answered: Required 1 Required 2 Required 3 Would…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 13MC: Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours...

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5 Why may departmental overhead rates NOT correctly assign overhead costs? Select one: a. Because of the high correlation between direct labour hours and the incurrence of overhead costs. b. Because of the use of direct labour hours in allocating overhead costs to products rather than machine time or quantity of materials. c. Because of the over-reliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production. d. Because of the difficulties associated with identifying cost pools for the first stage of the allocation process.
Question 12 Which of the following statement is CORRECT regarding Job order cost accounting system? O Under the proration approach, if manufacturing overhead had been overallocated, the Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold accounts would be increased. Under the proration approach, if manufacturing overhead had been overallocated, the Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold accounts would be decreased. O Under the adjusted allocation rate approach, the total under- or overallocated manufacturing overhead is included in this year's Cost of Goods Sold. Under the direct write-off method, total under- or overallocated manufacturing overhead is always added to the Cost of Goods Sold. 0000
Question A6 In a process to calculate full cost for a product or service, what is the correct order of the following steps? A Apportion general overheads between departments Allocate specific departmental overheads to the relevant department Apportion service department costs to production cost centres Total product department overheads B Allocate specific departmental overheads to the relevant department Apportion general overheads between departments Total product department overheads Apportion service department costs to production cost centres C Allocate specific departmental overheads to the relevant department Apportion general overheads between departments Apportion service department costs to production cost centres Total product department overheads D Allocate specific departmental overheads to the relevant department Apportion service department costs to production cost centres Apportion general overheads between departments Total product department overheads
How do the multiple production department and the single plantwide factory overhead rate methods differ?
Under what two conditions would the multiple production department factory overhead rate method provide more accurate product costs than the single plantwide factory overhead rate method?
Under what conditions might a company use activity-based costing to allocate factory overhead to products?
Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours instead of on direct labor B. frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product C. limit the number of cost pools D. always result in an increase of at least one products selling price
8 Identify the correct order of traditional approach method? I. Absorption of production departments' overhead by the end products. II. Allocation and apportionment of overhead to various production departments and service departments. III. Reapportionment of service departments' overhead to production departments a. I,II and III b. II,III and I c. II,I and III d. III,II and I
Q.1.2 The direct method as used by Ultimate Manufacturers is one method that can be used to re-assign service department cost. Discuss two other methods that can be used to re-assign service department overheads.
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Required 1 Required 2 Required 3 Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates?