Answered: Total costs accumulated for a…

Total costs accumulated for a particular job are typically presumed to be less accurate when a company uses multiple overhead rates. True or False True False

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 3DQ: Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product...

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Total costs accumulated for a particular job are typically presumed to be less accurate when a company uses multiple overhead rates.
True or False
True
False

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Traditional overhead allocations result in which of the following situations? a. Overhead costs are assigned as period costs to manufacturing operations. b. High-volume products are assigned too much overhead, while low-volume products are assigned too little overhead. c. Low-volume products are assigned too much overhead, while high-volume products are assigned too little overhead. d. The resulting allocations cannot be used for financial reports.
-Online When the manufacturing overhead costs applied in a period exceeds the actual manufacturing overhead costs in the same period, then manufacturing overhead would be considered to be overapplied. True or False True False
What is a good response to? Indirect expenses, termed overhead costs, are vital for business operations yet aren't tied to specific products or services. In both manufacturing and services, these costs impact financial outcomes and decisions. Typical overhead examples include rent, utilities, equipment depreciation, administrative salaries, and maintenance. Allocating overhead in job and process costing systems is challenging. In job costing, where expenses are pinpointed to particular jobs or projects, varying sizes and complexities make accurate overhead allocation tough, risking under- or over-costing. In process costing, averaging costs across produced units can obscure inefficiencies within the production process. Certain industries face intricate hurdles with overhead distribution. Construction, juggling diverse job sites and project scopes, finds it hard to allocate fluctuating overheads accurately. The healthcare industry similarly struggles with non-revenue overheads like…
Setting up a time-based activity-based costing system does not require extensive interviews with employees. True or False True False
A job order cost system identifies costs with a particular job rather than with a set time period. True False
A: TRUE/FALSE The main feature of a job costing system is that no two orders are necessarily alike and all orders do not pass through the same manufacturing process.
A job cost accounting system is suitable for similar products that are mass produced. True False
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.
Explain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwide rates to assign cost accurately.
Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B. identify non-value-added costs C. analyze the effect on manufacturing overhead D. identify the correlation between the potential driver and manufacturing overhead
Which is not a task typically associated with ABC systems? A. calculating the overhead application rate for each cost pool B. applying a single cost rate C. identifying a cost driver D. more correctly allocating overhead costs
Before automation became more prevalent, overhead was often calculated and allocated as a function of direct labor costs or direct labor hours. Why was this the case, and has this pattern changed?