Which of the following statements is incorrect? OA. If MOH is overallocated to a job that has been sold, and the company calculates sales price by marking up job costs, the job will likely be underpriced. OB. The formula to arrive at the POHR is total budgeted manufacturing overhead divided by total estimated allocation base. O C. To calculate the increase to WIP for allocated MOH costs, the POHR is multiplied by the actual amount of the allocation based used by the cost object. D. "Number of units" is typically not an appropriate allocation base for MOH because the company's products do not consume equal overhead resources. O E. If the over/underallocated MOH is fairly large and the majority of the units have not been sold, the balance in MOH should be prorated between WIP, FG, and COGS.

Which of the following statements is incorrect? OA. If MOH is overallocated to a job that has been sold, and the company calculates sales price by marking up job costs, the job will likely be underpriced. OB. The formula to arrive at the POHR is total budgeted manufacturing overhead divided by total estimated allocation base. O C. To calculate the increase to WIP for allocated MOH costs, the POHR is multiplied by the actual amount of the allocation based used by the cost object. D. "Number of units" is typically not an appropriate allocation base for MOH because the company's products do not consume equal overhead resources. O E. If the over/underallocated MOH is fairly large and the majority of the units have not been sold, the balance in MOH should be prorated between WIP, FG, and COGS.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 4DQ: In the variable costing income statement, how are the fixed manufacturing costs reported, and how...

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Question

Which of the following statements is incorrect?
O A.
If MOH is overallocated to a job that has been sold, and the company
calculates sales price by marking up job costs, the job will likely be
underpriced.
O B. The formula to arrive at the POHR is total budgeted manufacturing overhead
divided by total estimated allocation base.
O C. To calculate the increase to WIP for allocated MOH costs, the POHR is
multiplied by the actual amount of the allocation based used by the cost object.
D. "Number of units" is typically not an appropriate allocation base for MOH
because the company's products do not consume equal overhead resources.
If the over/underallocated MOH is fairly large and the majority of the units have
not been sold, the balance in MOH should be prorated between WIP, FG, and
COGS.
O E.

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