Exercise 10A-4 (Algo) Fixed Overhead Varlances [LO10-4] Selected operating Information on three different companies for a recent year is given below. A Company B с Full-capacity machine-hours Budgeted machine-hours* 21,000 10,000 11,000 20,000 9,000 11,000 Actual machine-hours 20,000 9,700 10,000 Standard machine-hours allowed for actual production 20,300 8,500 11,000 *Denominator activity for computing the predetermined overhead rate. Required: For each company, state whether the volume variance would be favorable or unfavorable. Note: Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero varlance.) Company A Company B Company C

Exercise 10A-4 (Algo) Fixed Overhead Varlances [LO10-4] Selected operating Information on three different companies for a recent year is given below. A Company B с Full-capacity machine-hours Budgeted machine-hours* 21,000 10,000 11,000 20,000 9,000 11,000 Actual machine-hours 20,000 9,700 10,000 Standard machine-hours allowed for actual production 20,300 8,500 11,000 *Denominator activity for computing the predetermined overhead rate. Required: For each company, state whether the volume variance would be favorable or unfavorable. Note: Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero varlance.) Company A Company B Company C

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 9PB: Mountain Tops applies overhead on the basis of direct labor hours and reports the following...

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Knowledge Check 01 In the cost formula (Y = a +bX) that is used to estimate the total manufacturing overhead cost for a given period, the letter "a" refers to the estimated O total manufacturing overhead cost O total fixed manufacturing overhead cost O variable manufacturing overhead cost per unit of the allocation base O total amount of the allocation base
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.
Requirement 1. Record Brookman's direct labor journal entry (use Wages Payable). Journalize the incurrence and assignment of direct labor costs, including the related variances. (Prepare a single compound journal entry. Record debits first, then credits. Select the explanations on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit - X Data Table AC x AQ SC x AQ SC x SQ $13.00 per DLHr $16.00 per DLHR $16.00 per DLHr 1,650 DLHF 1,650 DLHR 1.200 DLHr $21,450 $26.400 $19,200 Requirements 1. Record Brookman's direct labor journal entry (use Wages Payable). 2. Explain what management will do with this variance information. Cost Efficiency Variance Variance $4.950 F S7,200 U Print Done Print Done
Time left 1:5 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. As production takes place, all manufacturing costs are added to the: O a. Production Labor account. O b. Manufacturing-Overhead Inventory account. O C. Finished-Goods Inventory account. Od. Cost-of-Goods-Sold account. е. Work-in-Process Inventory account. CLEAR MV CHOLCE .edu.om/mod/quiz/attempt.php?attempt=1764887&cmid=875183&page=13#question-1984017-11
True or False. The predetermined overhead rate is an amount obtained by dividing the total overhead for the past period by the total overhead allocation base for the coming period.
Select the correct answer The predetermined manufacturing overhead rate is usually computed: A) During the financial year B) When overheads have been incurred C)At the beginning of financial year D)At the end of financial year. The traditional cost drivers used in computing overhead absorption rates are: A)Direct labor hours, machine hours, direct labor costs B)Direct labor hours, machine costs, direct labor cost C)Floor space, rent & rates, machinery value D)Direct labor costs, machine hours, factory overhead. Overheads applied are calculated by: A)Cost driver divided by the OAR B)Budgeted production overheads divided by the budgeted cost driver activity C)OAR times the actual cost driver activity D)OAR times the estimated cost driver activity. Under allocated manufacturing overhead costs are always the result of which of the following situations. A)Estimated overhead costs are greater than actual overhead costs B)Applied overhead costs are less than actual overhead costs…
Predetermined overhead rates are calculated: a. first and then multiplied by total actual units of the allocation base to compute the applied manufacturing overhead costs. b. based on actual total manufacturing overhead costs C. by dividing total estimated manufacturing overhead cost by total actual units of the allocation base. d. none of the given answers is correct. e. at the end of the accounting period once the actual amount of manufacturing overhead is known.
Calculating under/overallocated overhead The T-account showing the manufacturing overhead activity for Aliyah Corp. for 2018 is as follows: Requirements What is the actual manufacturing overhead? What is the allocated manufacturing overhead? Is manufacturing overhead underallocated or overallocated? By how much?
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?
Mountain Tops applies overhead on the basis of direct labor 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 applied or under applied, and by what amount? D. What is the journal entry to dispose of the over applied or under applied overhead?
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.
When calculating the predetermined manufacturing overhead rate, what is the correct basis of calculation? a.Estimated overhead costs divided by the estimated amount of the cost driver or allocation base b.Estimated amount of the cost driver divided by the estimated total overhead costs c.Estimated overhead costs divided by the number of days in a year d.Actual overhead costs of the prior year divided by the actual amount of the cost driver or allocation base