Exam 16: Cost Concepts and Cost Allocation

The following information has been made available to you.Assume that overhead is applied on the basis of direct labor hours. Estimated overhead \ 1,638,000 Estimated direct labor hours 390,000 Actual direct labor hours 442,000 Actual overhead \ 1,862,000 a. Compute the predetermined overhead rate. b. Compute the amount of applied overhead for the year. c. Compute the amount of underapplied or overapplied overhead.

Manufacturing costs incurred in an accounting period cannot be included in cost of goods sold for the subsequent accounting period.

Period costs flow through three types of inventory accounts before becoming part of the cost of goods sold amount.

A projected cost for the future is a

Depreciation on factory equipment is a value-adding cost.

Which of the following is a collection of overhead costs related to a cost object?

The expressions total manufacturing costs and total cost of goods manufactured are not synonymous.

Raisin Company's overhead cost was overapplied by $4,300 in the current year.The estimated overhead was $170,000,and the applied overhead was $166,000.Compute the actual overhead.

Cost of goods manufactured decreases the Work in Process Inventory account.

Costs such as salary of supervisors and other support personnel,which are accounted for as overhead costs,are called

Overhead costs are not

Which of the following results in a predetermined overhead rate?

The Finished Goods Inventory and Cost of Goods Sold for a manufacturing company for the year 20xx are as follows: January 1 Finished Goods Inventory,$382,500; December 31 Finished Goods Inventory,$270,000; Cost of Goods Sold for the year,$1,488,000.The cost of goods manufactured for the year was

Sleney Company applies overhead on the basis of direct labor dollars,using a rate of $1.65 per labor dollar.How much overhead would be applied to products in January if $18,600 of labor costs were incurred and 2,200 labor hours were worked?

Calculation of a product's overhead rate is done during the accounting period.

Overhead costs generally are estimated as part of the normal budgeting function.

Product unit cost is computed by dividing cost of goods sold by the number of units sold.

Which of the following terms does not apply to materials and supplies that cannot be traced conveniently to specific products?

Which of the following is a value-adding cost?

A predetermined overhead rate allows managers to make more timely product pricing decisions.