Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 4, Problem 4.11Q
Comment on the following statement: “In a normal-costing system, the amounts in the Manufacturing
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Comment on the following statement: “In a normal-costing system, the amounts in the Manufacturing Overhead Control account will always equal the amounts in the Manufacturing Overhead Allocated account.”
Please explain the statement below thoroughly with examples. (Ture or False)
"In activity-based costing, the manufacturing overhead cost per unit will depend partially on the number of units in a batch."
1.The overhead absorption rate used to allocate manufacturing overhead is calculated by:
Select one:
a.dividing the total estimated manufacturing overhead costs by the total estimated quantity of the allocation base
b.dividing the total estimated manufacturing overhead by the total actual quantity of the cost driver
c.dividing the total actual manufacturing overhead costs by the total estimated quantity of the cost driver
d.dividing the total estimated quantity of the cost driver by the total estimated manufacturing overhead costs
Chapter 4 Solutions
Cost Accounting (15th Edition)
Ch. 4 - Define cost pool, cost tracing, cost allocation,...Ch. 4 - How does a job-costing system differ from a...Ch. 4 - Why might an advertising agency use job costing...Ch. 4 - Describe the seven steps in job costing.Ch. 4 - Give examples of two cost objects in companies...Ch. 4 - Describe three major source documents used in...Ch. 4 - What is the advantage of using computerized source...Ch. 4 - Give two reasons why most organizations use an...Ch. 4 - Distinguish between actual costing and normal...Ch. 4 - Describe two ways in which a house-construction...
Ch. 4 - Comment on the following statement: In a...Ch. 4 - Describe three different debit entries to the...Ch. 4 - Describe three alternative ways to dispose of...Ch. 4 - When might a company use budgeted costs rather...Ch. 4 - Prob. 4.15QCh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Prob. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26ECh. 4 - Prob. 4.27ECh. 4 - Prob. 4.28ECh. 4 - Prob. 4.29ECh. 4 - Prob. 4.30ECh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32PCh. 4 - Prob. 4.33PCh. 4 - Prob. 4.34PCh. 4 - Prob. 4.35PCh. 4 - Prob. 4.36PCh. 4 - Prob. 4.37PCh. 4 - Prob. 4.38PCh. 4 - Prob. 4.39PCh. 4 - Prob. 4.40PCh. 4 - Prob. 4.41P
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- Using ABC to allocate manufacturing overhead can helpmanagers to:a. Identify what activities drive overhead costs.b. Set product prices.c. Locate inefficiencies in the production process.d. Do all of the above.arrow_forwardWhich of the following is a characteristic of a process cost accounting system? A. Material, Labor, and Overheads are accumulated by orders. B. Companies use this system if they process custom orders. C. Only Closing stock of work in process is restated in terms of completed units. D. Opening and Closing stock of work in process are related in terms of completed units.arrow_forwardIndicate whether the following statement is true or false, then support your view. By using a single cost pool and a single cost driver to allocate overhead, the more traditional methods of overhead assignment fully considers the influence on cost of the different activities that occur to make a product.arrow_forward
- Fill in the blank. __________ method is a process costing system which computes equivalent units only on work done in the current period.arrow_forwardThe overhead absorption rate used to allocate manufacturing overhead is calculated by: a. dividing the total actual manufacturing overhead costs by the total estimated quantity of the cost driver b. dividing the total estimated manufacturing overhead by the total actual quantity of the cost driver c. dividing the total estimated manufacturing overhead costs by the total estimated quantity of the allocation base d. dividing the total estimated quantity of the cost driver by the total estimated manufacturing overhead costsarrow_forwardWhich of the following best defines standard costing? a. It is the same as actual costing but done in real time. b. It is a system that allocates overhead costs on the basis of standard overhead rates times the actual quantities of the allocation base used. c. It is a system that traces direct costs to output produced by multiplying the standard prices or rates by the standard quantities of inputs allowed for the actual output produced. d. It is a system that traces direct cost to output by multiplying actual prices or rates by actual quantities of inputs and allocates overhead costs on the basis of actual quantities of the allocation base used.arrow_forward
- In cost accounting, what is the purpose of job costing?a. To allocate overhead costs to productsb. To assign costs to specific production batches or jobsc. To calculate fixed costs for the entire organizationd. To determine variable costs for each product linearrow_forwardThe use of a plantwide manufacturing overhead rate implies that the activities that cause overhead expenses are the same across all departments and products.True \sFalsearrow_forwardManufacturing overhead is the costs that can be traced directly to specific units produced. TRUE OR FALSEarrow_forward
- In a process costing system, the cost per equivalent unit must be computed before computing equivalent units. True Falsearrow_forwardThe overhead absorption rate used to allocate manufacturing overhead is calculated by: Select one: a. dividing the total actual manufacturing overhead costs by the total estimated quantity of the cost driver b. dividing the total estimated quantity of the cost driver by the total estimated manufacturing overhead costs c. dividing the total estimated manufacturing overhead costs by the total estimated quantity of the allocation base d. dividing the total estimated manufacturing overhead by the total actual quantity of the cost driver The predetermined manufacturing overhead rate is usually computed: Select one: A. At the end of the financial year B. At the beginning of the financial year C. During the financial year D. When overheads have been incurredarrow_forwardWhat does the following statement mean? “Accounting for overhead involves an important costbenefit issue.” Why is that issue important?arrow_forward
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