Answered: When the predetermined overhead rate is…

When the predetermined overhead rate is based on direct labor-hours, the amount of overhead applied to a job is proportional to the estimated amount of direct labor-hours for the job. True of False.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1Q: What is the predetermined overhead rate, and when is it typically estimated?

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When the predetermined overhead rate is based on direct labor-hours, the amount of overhead applied to a job is proportional to the estimated amount of direct labor-hours for the job. True of False.

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Similar questions

Is manufacturing overhead cost given to tasks based on a precise determination of each job's overhead cost or on an estimation? Explain.
What account is credited when overhead cost is applied to Work in Process? Would you expect the amount of overhead applied for a period to equal the actual overhead costs of the period? Why or why not?
True or False. The predetermined overhead rate is an amount obtained by dividing the total overhead for the past period by the total overhead allocation base for the coming period.
When used as the denominator in the calculation of an overhead rate, which of the following will cause the least amount of overhead to be applied? a. Theoretical activity level b. Expected activity level c. Practical activity level d. Normal activity level
As the actual manufacturing overhead costs are incurred throughout the period, they are credited to the Manufacturing Overhead account. Select one: True False
Which of the following statements is false? a. Actual overhead costs always enter the Work-in-Process account. in b. The cost of a job includes direct materials, direct labor, and applied overhead. The use of normal costing means that overhead is applied to each job using a predetermined rate. C. d. Indirect labor is assigned as a part of overhead. e. None of these are correct. Select one: O b O e a
Overtime salary and Nightshift allowance are examples of _______. A. Direct Labour cost B. General and Administrative Cost C. Indirect Labour cost D. Manufacturing Overhead
If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate, then manufacturing overhead must have been under-allocated. Select one: True False
A normal cost system applies overhead cost to jobs by multiplying: Multiple Choice An actual overhead rate by the estimated amount of the allocation base used by the jobs. A predetermined overhead rate by the estimated amount of the allocation base used by the jobs. An actual overhead rate by the actual amount of the allocation base used by the jobs. A predetermined overhead rate by the actual amount of the allocation base used by the jobs.
Please explain:: What is the purpose of an overhead rate What are the steps to apply the overhead cost to a product What does it represent when the overhead cost for over-applied
2. Which of the following is a possible cost driver that may be used in calculating a company's predetermined overhead rate? A) Direct labour hours B) Direct labour dollars C) Machine hours D) All of the above
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