Actual overhead: The actually occurring indirect manufacturing cost is called the actual overhead. Applied overhead: The indirect manufacturing cost applied to the manufactured goods is called applied overhead The account to be credited when the overhead costs are applied to work in process. Explain with reasons whether the overhead cost would be expected to be equal to the actual overheads cost incurred for the period or not.

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Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 3, Problem 8Q

To determine

Actual overhead: The actually occurring indirect manufacturing cost is called the actual overhead.

Applied overhead: The indirect manufacturing cost applied to the manufactured goods is called applied overhead

The account to be credited when the overhead costs are applied to work in process. Explain with reasons whether the overhead cost would be expected to be equal to the actual overheads cost incurred for the period or not.

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Cariveh Co sells automotive supplies from 25 different locations in one country. Each branch has up to 30 staff working there, although most of the accounting systems are designed and implemented from the company's head office. All accounting systems, apart from petty cash, are computerised, with the internal audit department frequently advising and implementing controls within those systems. Cariveh has an internal audit department of six staff, all of whom have been employed at Cariveh for a minimum of five years and some for as long as 15 years. In the past, the chief internal auditor appoints staff within the internal audit department, although the chief executive officer (CEO) is responsible for appointing the chief internal auditor. The chief internal auditor reports directly to the finance director. The finance director also assists the chief internal auditor in deciding on the scope of work of the internal audit department. You are an audit manager in the internal audit…

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Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 3, Problem 8Q

To determine

Actual overhead: The actually occurring indirect manufacturing cost is called the actual overhead.

Applied overhead: The indirect manufacturing cost applied to the manufactured goods is called applied overhead

The account to be credited when the overhead costs are applied to work in process. Explain with reasons whether the overhead cost would be expected to be equal to the actual overheads cost incurred for the period or not.

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Answer 3

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Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 3, Problem 8Q

To determine

Actual overhead: The actually occurring indirect manufacturing cost is called the actual overhead.

Applied overhead: The indirect manufacturing cost applied to the manufactured goods is called applied overhead

The account to be credited when the overhead costs are applied to work in process. Explain with reasons whether the overhead cost would be expected to be equal to the actual overheads cost incurred for the period or not.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 3, Problem 8Q

To determine