Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 2, Problem 17Q
Matt Litkee is confused about under- and overapplied manufacturing
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As the actual manufacturing overhead costs are incurred throughout the period, they are credited to the Manufacturing Overhead account.
Select one:
True
False
The basis used for allocating manufacturing overhead (such as machine hours or direct
labor hours) should closely align with
O a. estimation techniques used in other areas of financial reporting.
O b. the GAAP rules for allocating overhead.
O C.
the incurrence of overhead costs.
d.
the way that competitors allocate overhead.
Which of the following statements is true regarding over-applied manufacturing overhead?
O over-applied overhead is irrelevant and does not ever have to be corrected
O the amount of overhead applied to a job was higher than the actual overhead incurred
O the amount of manufacturing overhead applied to the job's cost was less than the actual overhead
Chapter 2 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 2 - (a) Mary Barett is not sure about the difference...Ch. 2 - Prob. 2QCh. 2 - What type of industry is likely to use a job order...Ch. 2 - What type of industry is likely to use a process...Ch. 2 - Your roommate asks your help in understanding the...Ch. 2 - Prob. 6QCh. 2 - What source documents are used in accumulating...Ch. 2 - Entries to Manufacturing Overhead normally are...Ch. 2 - Stan Kaiser is confused about the source documents...Ch. 2 - What is the purpose of a job cost sheet?
Ch. 2 - Indicate the source documents that are used in...Ch. 2 - Explain the purpose and use of a materials...Ch. 2 - Sam Bowden believes actual manufacturing overhead...Ch. 2 - What elements are involved in computing a...Ch. 2 - Prob. 15QCh. 2 - Jane Neff believes that the cost of goods...Ch. 2 - Matt Litkee is confused about under- and...Ch. 2 - At the end of the year, under- or overapplied...Ch. 2 - Dicker Company begins operations on January 1....Ch. 2 - During January, its first month of operations,...Ch. 2 - In January, Dicker Company requisitions raw...Ch. 2 - Factory labor data for Dieker Company is given in...Ch. 2 - Data pertaining to job cost sheets for Dieker...Ch. 2 - Marquis Company estimates that annual...Ch. 2 - Assign manufacturing overhead to production.(LO...Ch. 2 - In March, Stinson Company completes Jobs 10 and...Ch. 2 - Prepare entries for service salaries and wages and...Ch. 2 - At December 31, balances in Manufacturing Overhead...Ch. 2 - During the current month, Wacholz Company incurs...Ch. 2 - Milner Company is working on two job orders. The...Ch. 2 - Washburn Company produces earbuds. During the...Ch. 2 - During the current month, Standard Corporation...Ch. 2 - For Eckstein Company, the predetermined overhead...Ch. 2 - The gross earnings of the factory workers for...Ch. 2 - Stine Company uses a job order cost system. On May...Ch. 2 - A job order cost sheet for Ryan Company is shown...Ch. 2 - Manufacturing cost data for Orlando Company, which...Ch. 2 - Ikerd Company applies manufacturing overhead to...Ch. 2 - Analyze job cost sheet aid prepare entry for...Ch. 2 - Crawford Corporation incurred the following...Ch. 2 - Enos Printing Corp. uses a job order cost system....Ch. 2 - At May 31, 2017, the accounts of Lopez Company...Ch. 2 - Tierney Company begins operations on April 1,...Ch. 2 - The following are the job cost related accounts...Ch. 2 - Determine cost of jobs end ending balance in work...Ch. 2 - Tombert Decorating uses a job order cost system to...Ch. 2 - Lott Company uses a job order cost system and...Ch. 2 - For the year ended December 31, 2017, the job cost...Ch. 2 - Prepare entries in a job order cost system and...Ch. 2 - Agassi Company uses a job order cost system in...Ch. 2 - Phillips Corporations fiscal year ends on November...Ch. 2 - Huegel Hollow Resort has ordered 20 rotomolded...Ch. 2 - Khan Products Company uses a job order cost...Ch. 2 - In the course of routine checking of all journal...Ch. 2 - Communication Activity You are the management...Ch. 2 - Prob. 2.5BYPCh. 2 - Prob. 2.6BYPCh. 2 - Prob. 2.7BYP
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- Why is the manufacturing overhead account debited as expenses are recognized and then credited when overhead is applied?arrow_forwardIf the factory overhead account has a negative balance, factory overhead is said to be: a.Underapplied B.Over-applied C.Undcrabsorbed D. In errorarrow_forwardThe journal entry for adjustment of underallocated manufacturing overhead includes a: A) credit to Finished Goods Inventory. B) credit to Manufacturing Overhead. C) debit to Work-in-Process Inventory. D) credit to Cost of Goods Sold.arrow_forward
- he following are considered part of overhead accounts, except: a. Indirect Materials b. Indirect Labor c. Plant Manager's salary d. Factory worker's salaryarrow_forwardAt the end of the accounting period manufacturing overhead will be either over- applied or under- applied. Explain how each of these may happen.arrow_forwardWhich one of the following is not correct regarding the predetermined overhead rate? The predetermned overhead rate is used to assign manufacturing overhead costs to cost objects such as products. b. The predetermined overhead rate uses actual figures for the manufacturing overhead cost but estimated figures for the cost allocation basis amount. C. The predetermined overhead rate uses estimated figures for the manufacturing overhead cost and estimated figures for the cost allocation basis amount. d. None of the given answers. e. The predetermined overhead rate is normally calculated at the beginning of the period.arrow_forward
- Google applies overhead to product costs. What account(s) is(are) used to eliminate overapplied or underapplied overhead from the Factory Overhead account, assuming the amount is not material?arrow_forwarda. What is (1) overapplied factory overhead and (2) underapplied factory overhead?b. If the factory overhead account has a debit balance, was factory overhead underapplied or overapplied?arrow_forward-Online When the manufacturing overhead costs applied in a period exceeds the actual manufacturing overhead costs in the same period, then manufacturing overhead would be considered to be overapplied. True or False True Falsearrow_forward
- The applied overhead is compared to the actual overhead, with any discrepancy going into one of the following three accounts: goods in process inventory, finished goods inventory, or cost of goods sold. Group startsTrue or Falsearrow_forwardOverhead costs are underapplied if the amount applied to Work in Process is: a . equal to actual overhead incurred . b . equal to estimated overhead . c . greater than estimated overhead . d. None of the given answer is correct e. greater than actual overhead incurred.arrow_forwardWhich of the following statements is false? a. Actual overhead costs always enter the Work-in-Process account. in b. The cost of a job includes direct materials, direct labor, and applied overhead. The use of normal costing means that overhead is applied to each job using a predetermined rate. C. d. Indirect labor is assigned as a part of overhead. e. None of these are correct. Select one: O b O e aarrow_forward
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