the following statements about predetermined overhead rates are correct, EXCEPT: O a. based on estimated total manufacturing overhead costs O b. calculated at the end of the accounting period once the actual amount of manufacturing overhead is known. O c. calculated by dividing total estimated manufacturing overhead cost by estimated units of the allocation base. O d. All the given answers are correct. calculated first and then multiplied by total O e. actual units of the allocation base to compute the applied manufacturing overhead costs.

the following statements about predetermined overhead rates are correct, EXCEPT: O a. based on estimated total manufacturing overhead costs O b. calculated at the end of the accounting period once the actual amount of manufacturing overhead is known. O c. calculated by dividing total estimated manufacturing overhead cost by estimated units of the allocation base. O d. All the given answers are correct. calculated first and then multiplied by total O e. actual units of the allocation base to compute the applied manufacturing overhead costs.

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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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

All the following statements about predetermined
overhead rates are correct, EXCEPT:
O a.
based on estimated total manufacturing
overhead costs
O b. calculated at the end of the accounting period
once the actual amount of manufacturing
overhead is known.
O c. calculated by dividing total estimated
manufacturing overhead cost by estimated
units of the allocation base.
d. All the given answers are correct.
е.
calculated first and then multiplied by total
actual units of the allocation base to compute
the applied manufacturing overhead costs.

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Please refer to questions to complete.
Required:1. Using the traditional approach to assigning overhead costs to academic programs:a. Calculate the predetermined overhead rate.b. Assign the overhead costs to each academic program using the predetermined rate.c. Calculate the total cost per student (direct costs plus overhead) of operating each academic program.2. Using ABC, complete the following requirements:a. Complete the first-stage allocation of overhead costs to academic programs.b. Calculate the activity rates for each of the activity cost pools.c. Using the activity rates calculated in (b), complete the second-stage allocation of overhead to academic programs.3. Based on the results of (2), calculate the total cost per student (direct costs plus overhead) of operating each academic program.4. Draft a memo to Maple explaining the key reasons for differences in the total cost per student of operating each academic program that arise between traditional costing approach and ABC.
Place the following steps required to prepare a process costing production report into their correct order. I. Reconcile the total cost of work in process inventory. II. Apply manufacturing overhead to specific jobs. III. Calculate cost per equivalent unit. IV. Record costs incurred for each job on a separate job cost sheet. V. Convert physical units into equivalent units. VI. Reconcile the number of physical units. VII. Prepare a production report. 1. 2. 3. 4. 5 List separately any step that should not be included in the process. (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) ■ I ✔ || IV VI iv MI V il V VI VII
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Single Plantwide Rate and Activity-Based Costing Whirlpool Corporation (WHR) conducted an activity-based costing study of its Evansville, Indiana, plant in order to identify its most profitable products. Assume that we select three representative refrigerators (out of 333): one low-, one medium-, and one high-volume refrigerator. Additionally, we assume the following activity-base information for each of the three refrigerators: Three Representative Number of Machine Number of Number of Sales Number of Refrigerators Hours Setups Orders Units Refrigerator-Low Volume 24 14 38 160 Refrigerator-Medium Volume 225 13 88 1,500 Refrigerator-High Volume 900 120 6,000 Prior to conducting the study, the factory overhead allocation was based on a single machine hour rate. The machine hour rate was $200 per hour. After conducting the activity-based costing study, assume that three activities were used to allocate the factory overhead. The new activity rate information is assumed to be as follows:…
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Which one is the correct answer?
Nn. 126.
Predetermined overhead rates are calculated: a. first and then multiplied by total actual units of the allocation base to compute the applied manufacturing overhead costs. b. based on actual total manufacturing overhead costs C. by dividing total estimated manufacturing overhead cost by total actual units of the allocation base. d. none of the given answers is correct. e. at the end of the accounting period once the actual amount of manufacturing overhead is known.