Predetermined overhead Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows: Predetermined factory overhead rate = Estimated total factory overhead costs Estimated activity rate To state: the meaning of over applied factory overhead.

Question

Beacon Corporation applies manufacturing overhead on the basis of direct labor hours. At the beginning of the most recent year, the company based its predetermined overhead rate on a total estimated overhead of $95,400 and 3,600 estimated direct labor hours. Actual manufacturing overhead for the year amounted to $98,800 and actual direct labor-hours were 3,500. The applied manufacturing overhead for the year was closest to __.

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 16, Problem 9DQ

(a)

(1)

To determine

Predetermined overhead

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows:

$Predetermined factory overhead rate = Estimated total factory overhead costsEstimated activity rate$

To state: the meaning of over applied factory overhead.

(b)

To determine

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

(c)

To determine

To state: the reporting of credit balance of factory overhead in interim balance sheet.

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Beacon Corporation applies manufacturing overhead on the basis of direct labor hours. At the beginning of the most recent year, the company based its predetermined overhead rate on a total estimated overhead of $95,400 and 3,600 estimated direct labor hours. Actual manufacturing overhead for the year amounted to $98,800 and actual direct labor-hours were 3,500. The applied manufacturing overhead for the year was closest to __.

Month cost units produced

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 16, Problem 9DQ

(a)

(1)

To determine

Predetermined overhead

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows:

$Predetermined factory overhead rate = Estimated total factory overhead costsEstimated activity rate$

To state: the meaning of over applied factory overhead.

(b)

To determine

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

(c)

To determine

To state: the reporting of credit balance of factory overhead in interim balance sheet.

Expert Solution & Answer

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 16, Problem 9DQ

(a)

(1)

To determine

Predetermined overhead

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows:

$Predetermined factory overhead rate = Estimated total factory overhead costsEstimated activity rate$

To state: the meaning of over applied factory overhead.

(b)

To determine

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

(c)

To determine

To state: the reporting of credit balance of factory overhead in interim balance sheet.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 16, Problem 9DQ

(a)

(1)

To determine

Predetermined overhead

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows:

$Predetermined factory overhead rate = Estimated total factory overhead costsEstimated activity rate$

To state: the meaning of over applied factory overhead.

(b)

To determine

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

(c)

To determine

To state: the reporting of credit balance of factory overhead in interim balance sheet.

Expert Solution & Answer

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Answer 5

Chapter 16, Problem 9DQ

(a)

(1)

To determine

Predetermined overhead

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows:

$Predetermined factory overhead rate = Estimated total factory overhead costsEstimated activity rate$

To state: the meaning of over applied factory overhead.

(b)

To determine

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

(c)

To determine

To state: the reporting of credit balance of factory overhead in interim balance sheet.

Answer 6

Chapter 16, Problem 9DQ

(a)

(1)

To determine

Predetermined overhead

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows:

$Predetermined factory overhead rate = Estimated total factory overhead costsEstimated activity rate$

To state: the meaning of over applied factory overhead.

Answer 7

Chapter 16, Problem 9DQ

(a)

(1)

To determine

Predetermined overhead

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate. The formula to calculate the predetermined factory overhead rate is as follows:

$Predetermined factory overhead rate = Estimated total factory overhead costsEstimated activity rate$

To state: the meaning of over applied factory overhead.

Answer 8

(b)

To determine

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

Answer 9

(b)

To determine

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

Answer 10

(c)

To determine

To state: the reporting of credit balance of factory overhead in interim balance sheet.

Answer 11

(c)

To determine

To state: the reporting of credit balance of factory overhead in interim balance sheet.

Answer 12

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Ch. 16 - Prob. 1DQ Ch. 16 - What kind of firm would use a job order cost...Ch. 16 - Which account is used in the job order cost system...Ch. 16 - Prob. 4DQ Ch. 16 - What is a job cost sheet?Ch. 16 - Prob. 6DQ Ch. 16 - Discuss how the predetermined factory overhead...Ch. 16 - A. How is a predetermined factory overhead rate...Ch. 16 - Prob. 9DQ Ch. 16 - Describe how a job order cost .system can be used...

Solution Summary: The author explains that predetermined factory overhead costs are applied or allocated to cost of job based on a formula. If the amount of overhead applied is greater than actual overhead incurred by the company, it is underapplied.

To explain: if factory overhead is underapplied or overapplied if factory overhead has debit balance.

To state: the reporting of credit balance of factory overhead in interim balance sheet.

Chapter 16 Solutions