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

Sheets Corporation The following information was extracted from the first year absorption-based accounting records of Sheets Corporation Refer to Sheets Corporation. What is Cost of Goods Sold for Sheets Corporation's first year?

McFatter Office Supply Company has the following information available regarding costs and revenues for two recent months. Selling price is $20. Required:

Variable costing is commonly used for external reporting.

Under absorption costing, if sales remain constant from period 1 to period 2, the company will report a larger income in period 2 when

Anderson Corporation Anderson Corporation has the following standard costs associated with the manufacture and sale of one of its products: Refer to Anderson Corporation. The volume variance under absorption costing is

If actual overhead exceeds applied overhead, factory overhead is said to be ____________________.

What are three reasons that overhead must be allocated to products?

If overapplied factory overhead is immaterial, the account is closed by a credit to Cost of Goods Sold.

If the level of activity increases,

Expected capacity is a long-run measure of activity.

The measure of production that considers historical and estimated future production levels and cyclical fluctuations is referred to as:

The dollar amount of overhead assigned to work-in-process inventory using a predetermined rate is known as ____________________ overhead.

An income statement is prepared as an internal report. Under which of the following methods would the term contribution margin appear?

How will a favorable volume variance affect net income under each of the following methods?

For its most recent fiscal year, a firm reported that its contribution margin was equal to 40 percent of sales and that its net income amounted to 10 percent of sales. If its fixed costs for the year were $60,000, how much were sales?

Variable costing considers which of the following to be product costs?

In the variable costing income statement, which line separates the variable and fixed costs?

O'Brien Corporation applies overhead at the rate of 70 percent of direct labor. O'Brien incurred $450,000 of direct labor during the current year. O'Brien incurred actual overhead of $367,000. (a) Compute the amount of under- or overapplied overhead for O'Brien Corporation for the current year (b) Prepare the necessary journal entry to dispose of the under- or overapplied overhead (assuming that the amount is immaterial).

The costing system that classifies costs by functional group only is

A firm presently has total sales of $100,000. If its sales rise, its