Exam 3: Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

The slope of a regression line is determined by dividing the change in total cost by the change in activity level.

Denver Corporation The records of Denver Corporation revealed the following data for the current year. Refer to Denver Corporation.Assume that Denver has underapplied overhead of $37,200 and that this amount is material.What journal entry is needed to close the overhead account? (Round decimals to nearest whole percent.)

William Shafer Company used least squares regression analysis to obtain the following output:

In relationship to changes in activity,fixed overhead changes

Since overhead costs are indirect costs,

In an actual cost system,factory overhead is assigned to an overhead control account and then allocated to products and services.

If a firm produces more units than it sells,absorption costing,relative to variable costing,will result in

The estimated maximum potential activity for a specified time is:

The high-low method excludes outliers from the calculation of the slope of a regression line.

Bush Corporation The following information has been extracted from the financial records of Bush Corporation for its first year of operations: Refer to Bush Corporation.Based on absorption costing,the Cost of Goods Manufactured for Bush Corporation's first year would be

The regression equation y = a+ bX assumes that the function is curvilinear in nature.

Kellman Corporation Kellman Corporation produces a single product that sells for $7.00 per unit.Standard capacity is 100,000 units per year; 100,000 units were produced and 80,000 units were sold during the year.Manufacturing costs and selling and administrative expenses are presented below. There were no variances from the standard variable costs.Any under- or overapplied overhead is written off directly at year-end as an adjustment to cost of goods sold. Kellman Corporation had no inventory at the beginning of the year. Refer to Kellman Corporation.In presenting inventory on the balance sheet at December 31,the unit cost under absorption costing is

Discuss underapplied and overapplied overhead and its disposition at the end of the period.

Discuss the application of the high-low method.

Why should predetermined overhead rates be used?

Absorption costing is commonly used for internal reporting.

If a firm uses variable costing,fixed manufacturing overhead will be included

Bush Corporation The following information has been extracted from the financial records of Bush Corporation for its first year of operations: Refer to Bush Corporation.Based on absorption costing,Bush Corporation's income in its first year of operations will be

Sales less variable cost of goods sold is referred to as ________________________________________.

The measure of activity that allows for routine variations in manufacturing activity is: