The traditional cost drivers used in computing overhead absorption rates are: A)Direct labor hours, machine hours, direct labor costs B)Direct labor hours, machine costs, direct labor cost C)Floor space, rent & rates, machinery value D)Direct labor costs, machine hours, factory overhead.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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The traditional cost drivers used in computing overhead absorption rates are:
A)Direct labor hours, machine hours, direct labor costs
B)Direct labor hours, machine costs, direct labor cost
C)Floor space, rent & rates, machinery value
D)Direct labor costs, machine hours, factory overhead.
A)Cost driver divided by the OAR
B)Budgeted production overheads divided by the budgeted cost driver activity
C)OAR times the actual cost driver activity
D)OAR times the estimated cost driver activity.
Under allocated manufacturing overhead costs are always the result of which of the following situations.
A)Estimated overhead costs are greater than actual overhead costs
B)Applied overhead costs are less than actual overhead costs
C)Actual overhead costs are greater than estimated overhead costs
D)Actual overhead costs are less than applied overhead costs.
The centrepiece of a job-costing system is the:
A)Job-cost sheet
B)Materials requisition form
C)Budgeted overhead rate
D)Labor time ticket
The following data relates to Bermuda Company for the year 2016
Estimated
Estimated direct labor cost $300,000
Estimated direct labor hours $ 30,000
Actual manufacturing overhead cost $289,000
Actual direct labor costs $315,000
Actual direct labor hours $ 33,000
Allocation base direct labor hours
Manufacturing overhead allocated for 2016 is:
A)$450,450
B)$264,000
C)$252,000
D)$220,500
The following data relates to Bermuda Company for the year 2016
Estimated manufacturing overhead cost $240,000
Estimated direct labor cost $300,000
Estimated direct labor hours $ 30,000
Actual manufacturing overhead cost $289,000
Actual direct labor costs $315,000
Actual direct labor hours $ 33,000
Allocation base direct labor hours
The manufacturing overhead variance for 2016 is:
A)$49,000 under applied
B)$25,000 under applied
C)$2900 over applied
D)$25,000 over applied.
Wright Brothers is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the year ended Dec 31, 2007.
Estimated labor cost $449,500
Actual direct labor cost $441,000
Estimated manufacturing overhead $359,600
Actual manufacturing overhead costs $338,000
Actual direct labor hours $242,000
The OAR when using direct labor hours as the cost driver is:
A)145% of direct labor costs
B)$1.81 per direct labor hour
C)$1.45 per direct labor hour
D)$1.49 per direct labor hour
Wright Brothers is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the year ended Dec 31, 2007.
Estimated labor cost $449,500
Actual direct labor cost $441,000
Estimated manufacturing overhead $359,600
Actual manufacturing overhead costs $338,000
Actual direct labor hours $242,000
Manufacturing overhead applied based on direct labor cost is
A)$352,800
B)$359,600
C)$360,000
D)$348,480
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