Predetermined overhead rates are calculated: O a. based on estimated total manufacturing overhead costs O b. at the beginning of the accounting period once the actual amount of manufacturing overhead is known. O c. first and then multiplied by total actual units of the allocation base to compute the applied manufacturing overhead costs. O d. All the given answers are correct. O e. by dividing total estimated manufacturing overhead cost by estimated units of the allocation base.

Predetermined overhead rates are calculated: O a. based on estimated total manufacturing overhead costs O b. at the beginning of the accounting period once the actual amount of manufacturing overhead is known. O c. first and then multiplied by total actual units of the allocation base to compute the applied manufacturing overhead costs. O d. All the given answers are correct. O e. by dividing total estimated manufacturing overhead cost by estimated units of the allocation base.

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Description: Time left 1:5Predetermined overhead rates are calculated:O a. based on estimated total manufacturing overhead costsO b. at the beginning of the accounting period once the actual amount of manufacturingoverhead is known.O c. first and then multiplied

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6MC: Which is the correct formula for computing the overhead rate? A. estimated use of the cost driver...

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The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent total dollars of expense, and the horizontal axes represent production in units, machine hours, or direct labor hours. In each case, the zero point is at the intersection of the two axes. Each graph may be used no more than once. Required: Select the graph that matches the lettered cost described here. a. Depreciation of equipmentthe amount of depreciation charged is computed based on the number of machine hours that the equipment was operated. b. Electricity billflat fixed charge, plus a variable cost after a certain number of kilowatt hours are used. c. City water billcomputed as follows: d. Depreciation of equipmentthe amount is computed by the straight-line method. e. Rent on a factory building donated by the citythe agreement calls for a fixed fee payment, unless 200,000 labor hours are worked, in which case no rent need be paid. f. Salaries of repair workersone repair worker is needed for every 1,000 machine hours or less (i.e., 0 to 1,000 hours requires one repair worker, 1,001 to 2,000 hours requires two repair workers, etc.).
Assuming that all materials are added at the beginning of the process and that labor and factory overhead are applied evenly during the process, compute the figures to be inserted in the blank spaces of the following data, using the weighted average cost method. [Hint: for best success in solving each Case, solve them in numerical order starting with (1)]
The predetermined overhead rate equals a. actual overhead divided by actual activity level for a period. b. estimated overhead divided by estimated activity level for a period. c. actual overhead minus estimated overhead. d. actual overhead multiplied by actual activity level for a period. e. one-twelfth of estimated overhead.
Compute the profit or loss on the job in (a) dollars and (b) as a percentage of the bid price. Express labor plus overhead as a percentage of total costs. (Round to one decimal place.)
Describe the Source 01 the data for increasing Work in Process for (a) direct materials, (b) direct labor, and (c) factory overhead
What is the predetermined overhead rate, and when is it typically estimated?
Carltons Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity-based costing method (Hint: the traditional method uses machine hours as the allocation base.)
MountaIn Peaks applies overhead on the basis of machine hours and reports the following information: A. What is the predetermined overhead rate? B. How much overhead was applied during the year? C. Was overhead over- or under applied, and by what amount? D. What is the journal entry to dispose of the over- or under applied overhead?
Which is nor needed to compute equivalent units of production? A. the percentage of completion for inventory still in process B. the number of units transferred out C. the number of units started and completed D. the material cost per unit
Which is the correct formula for computing the overhead rate? A. estimated use of the cost driver for production/estimated overhead for the activity B. estimated overhead for the product/estimated use of the cost driver for the activity C. estimated use of the cost driver for production/estimated overhead for the activity D. estimated overhead for the activity/estimated use of the cost driver for the activity
All the following statements about predetermined overhead rates are correct, EXCEPT: O a. based on estimated total manufacturing overhead costs O b. calculated at the end of the accounting period once the actual amount of manufacturing overhead is known. O c. calculated by dividing total estimated manufacturing overhead cost by estimated units of the allocation base. d. All the given answers are correct. е. calculated first and then multiplied by total actual units of the allocation base to compute the applied manufacturing overhead costs.
All the following statements about predetermined overhead rates are correct, EXCEPT: a. calculated at the beginning of the accounting period once the actual amount of manufacturing overhead is known. O b. calculated based on estimated total manufacturing overhead costs O c. All the given answers are correct. O d. by dividing total estimated manufacturing overhead cost by actual units of the allocation base. O e. calculated first and then multiplied by total actual units of the allocation base to compute the applied manufacturing overhead costs.