Exam 16: Cost Concepts and Cost Allocation

If overhead has been overapplied during the period,the adjusting entry could include a credit to the Cost of Goods Sold account.

Fixed costs per unit are constant along a defined range of activity.

Cost allocation is the process of assigning which of the following costs to specific cost objects?

The following information has been made available to you.Assume that overhead is applied on the basis of direct labor hours. Actual overhead \ 47,400 Estimated overhead \ 48,300 Actual direct labor hours 8,900 Estimated direct labor hours 9,200 a. Compute the predetermined overhead rate. b. Compute overhead applied. c. Compute over- or underapplied overhead (indicate amount and direction). d. Indicate whether cost of goods sold should be increased or decreased to adjust the balance to actual costs.

Which of the following represents the overhead applied to a product?

Consider the following information: direct materials used totaled $134,400; direct labor amounted to $396,800; overhead was computed to be $789,600; Work in Process Inventory on January 1,2010,was $378,200; and Work in Process Inventory on December 31,2010,was $385,200.What was the cost of goods manufactured?

The cost of goods manufactured is added to the beginning balance of Finished Goods Inventory to obtain the total cost of goods available for sale during the period.

Wages of machine operators and other workers involved in actually shaping the product are classified as direct labor costs.

In a manufacturing environment,costs of materials initially flow

A cost is classified as an overhead cost if it is not directly traceable to an end product or a cost object.

The costs of marketing and delivering a product are not included in its inventory valuation.

The following budget data are available for Howers Company: Estimated direct labor hours 16,000 Estimated direct labor dollars \ 170,000 Estimated \ 207,200 If overhead is to be applied based on direct labor hours,the predetermined overhead rate per hour (rounded)is

Lubrication used for machines is an example of a direct material.

A manufacturing company applies overhead based on direct labor hours.At the beginning of the year,it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000.Actual overhead costs incurred were $754,400,and actual direct labor hours were 92,000.Compute the predetermined overhead rate per direct labor hour.

Complete the following chart by placing an "X" under the applicable column headings.Classify each cost as a fixed cost or a variable cost and as either a direct or indirect product cost or a period cost.

Use the information below for the year ended December 31,20xx,to prepare the statement of cost of goods manufactured. Inventories Beginning Ending Materials inventory \ 41,000 \ 51,000 Work in process inventory 62,000 78,000 Direct materials purchased 258,000 Total direct labor costs 372,000 Total indirect labor costs 67,000 Utilities 41,000 Depreciation 54,000 Small tools 5,000 Factory insurance 3,000 Factory supervision 66,000 Miscellaneous overhead costs 11,000

As the management accountant for Bynami Enterprises,Inc.,you have been asked to prepare a statement of cost of goods manufactured at the end of the first quarter.Account balances at that time were as follows: Materials inventory, January 1, 20xx 510,500 Work in proces5 inventory, January 1, 20ax 697,300 Finished goods inventory, January 1, 20xx 701,200 Direct materials purchased during the quarter 1,105,400 Direct labor costs 154,800 Depreciation expense, plant and equipment 16,200 Plant supervisors' salaries 50,600 Insurance exgense, plant and equipment 1,100 Utilities exgense, plant 4,000 Indirect labor costs 16,800 Manufacturing Supplies exgense 3,400 Small tools expense 1,500 March 31 inventories were as follows: materials,$540,200; work in process,$795,400; and finished goods,$604,100.Prepare the statement of cost of goods manufactured for the first quarter of 20xx.

Manufacturing costs behave as variable or fixed costs.

A manufacturing company applies overhead based on direct labor hours.At the beginning of the year,it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000.Actual overhead costs incurred were $754,400,and actual direct labor hours were 92,000.The entry to assign overhead costs during the year would be

Period costs are consumed entirely in the current reporting period.