Which of the following statements best describes why the use of a single plantwide rate toallocate manufacturing overhead may distort products costs?O The use of robotics has increased the correlation between direct labor hours and the actual amount ofoverhead costs associated with specific product linesThe practical difficulties of accurately measuring the direct labor hours associated with speciic batches ina job order cest systemO The practical difculties of accurately measuring the machine hours associated with speciic batches in ajob order cost system.O The bookkeeping costs of combining the different types of overhead costs-indirect labor, indirectmaterials and other overhead-into a sinele cost pool.O The increase in overhead costs as a percentage of total manufacturing costs, in concert with an increase inthe diversity of the product ines that companies produce.

SOLUTION FORMULA = PLANTWIDE OVERHEAD RATE = TOTAL OVERHEAD / DIRECT LABOR HOURS.

Which of the following statements best describes why the use of a single plantwide rate to allocate manufacturing overhead may distort products costs? O The use of robotics has increased the corelation between direct labor hours and the actual amount of overhead costs associated with specific product lines O The practical dficulties of accurately measuring the direct labor hours associated with speciic batches in a job order cost system O The practical dficuties of accurately measuring the machine hours associated with speciic batches in a job order cost system. O The bookkeeping costs of combining the diferent types of overhead costs-indirect labor, indirect materials and other overhead-into a sinele cost pool O The increase in overhead costs as a percentage of total manufacturing costs, in concert with an increase in the diversity of the product ines that companies produce

Which of the following statements best describes why the use of a single plantwide rate to allocate manufacturing overhead may distort products costs? O The use of robotics has increased the corelation between direct labor hours and the actual amount of overhead costs associated with specific product lines O The practical dficulties of accurately measuring the direct labor hours associated with speciic batches in a job order cost system O The practical dficuties of accurately measuring the machine hours associated with speciic batches in a job order cost system. O The bookkeeping costs of combining the diferent types of overhead costs-indirect labor, indirect materials and other overhead-into a sinele cost pool O The increase in overhead costs as a percentage of total manufacturing costs, in concert with an increase in the diversity of the product ines that companies produce

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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Which of the following statements is true? O The first step in activity-based costing is to assign overhead costs to products using cost drivers ABC usually results in less appropriate management decisions Activity-based costing allocates overhead to multiple activity cost pools and assigns the cost pools to products using cost drivers O Traditional costing systems use multiple predetermined overhead rates
A job cost accounting system is suitable for similar products that are mass produced. True False
When a company implements activity-based costing, manufacturing overhead cost is often shifted from low volume products to high volume products, with a higher unit cost resulting for the high volume products. Please explain (True or False) thoroughly.
Which of the following is NOT true about a resource cost driver under Activity based costing? O a. Sales orders are used to assign the cost of machines O b. Resource cost driver is used to assign the cost of the resource to an activity OC. Number of purchased orders placed will determine the cost of purchasing the materials O d. Number of times machines are set up will determine their cost of setting up
Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work -in-Process Inventory , Finished Goods Inventory , and Cost of Goods Sold? a . The balance in the Work-in - Process account after allocation will be the same under either method . b . The balance in the Work-inProcess account after allocation will be higher if the underapplied overhead is closed out by allocating it to all appropriate accounts . c. None of given answer is correct . d. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold . e. Cost of Goods Sold will be higher if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold
why are departmental overhead rates more accurate for product costing than a plantwide overhead rate?
Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold? Select one: O a. The balance in the Work-in-Process account after allocation will be higher if the underapplied overhead is closed out by allocating it to all appropriate accounts. O b. Cost of Goods Sold will be higher if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. Oc. None of given ANSWER is correct. O d. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. O e. The balance in the Work-in-Process account after allocation will be the same under either method.
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‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when the expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less than the normal loss are the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production, and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.
the concept of a non-linear cost function which is usually used to predict the cost of labor who carries out a repetitive production process is called ...
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