Overhead Business

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Overhead Business Questions and Answers

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Why isn't manufacturing overhead traced directly to units of product?
How will the relationship between applied and actual overhead get reflected in the income statement?
When is a manufacturing variance generated during an inventory or expense?
Why is manufacturing overhead applied to jobs rather than using actual overhead incurred?
What is the difference between predetermined overhead and plantwide overhead?
Does selling expense decrease when supplies are consumed?
A proper journal entry (without numbers) to record the adjustment of overapplied overhead to Cost of Goods Sold would be: Option A Cost of Goods Sold xx Work in Process xx Option B Cost of Go...
Williams, a professional services firm has an overhead of 625,000 pounds. It operates three divisions and an accountant s estimate of the overhead allocation per division is 38% for Division 1, 22%...
Manufacturing overhead has an under-allocated balance of $12,400; raw materials inventory balance is $145,600; work in process inventory is $122,400; finished goods inventory is $140,800; and cost...
Gustav's workshop has provided you with the following information: Actual machine hours: 20,000 Recovery rate - total overhead: $50 Recovery rate variable overhead: $24 Budget machine hours: 21,000...
Assume that actual overhead consisted of $30,000 for indirect labor, $20,000 for indirect material, and $10,000 for depreciation of factory equipment. Based on the preset rates, $65,000 of overhead...
KCA Ltd budgeted to incur an overhead cost, amounting to $3.5 million, and to work, 175,000 direct labor hours. During the period, the actual results were recorded as follows: Actual overhead: 4.3...
Jackson Company's overhead rate was based on estimates of $176,400 for overhead costs and 17,640 direct labor hours. Jackson's standards allow 2 hours of direct labour per unit produced. Production...
Jardine Ltd is developing factory overhead rates for the coming year. Budgeted overhead costs for the five factory departments are as follows: Cost ($) Cost Driver Milling 79,500 Machine hours Fin...
Garcia, Inc. uses a job-order costing system for its products, which pass from the Machining Department to the Assembly Department, to finished-goods inventory. The Machining Department is heavily...
Arvay Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to Cost of...
The budget for the month of May calls for 7,400 direct labor hours to be worked. Budget overhead is $88,000. Overhead is applied based on actual hours worked. Actual hours were 7,290 and actual ove...
Dagger Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $277,270. At the end of the year, actual...
Ikered Company applies manufacturing overhead to jobs on the basis of machine-hours used. Overhead costs are expected to total $ 300,000 for the year, and machine usage is estimated at 125,000 hour...
SG&A in a medium to a large-sized company would typically include the costs of all of the following departments except: a. Accounting Department b. Legal Department c. Overhead d. Marketing Dep...
At the end of the year, Jenkins Corporation had $120,000 in the Factory Overhead account and $100,000 in the Applied Factory Overhead account. Mark Gibbs, the controller, has decided that the overh...
The entry to apply factory overhead to jobs includes: a. a debit to Applied Factory Overhead. b. a debit to Work in Process. c. a credit to Work in Process. d. a debit to Cost of Goods Sold.
Over-applied manufacturing overhead means that: a. the applied manufacturing overhead cost was less than the actual manufacturing overhead cost. b. the applied manufacturing overhead cost was great...
Sutherland Company listed the following data for 2016: Budgeted factory overhead $2,100,000 Budgeted direct labor hours 89,000 Budgeted machine hours 51,000 Actual factory overhead 2,201,000 Actua...
On March 31, 2017, Alpha Corporation recorded the following factory overhead costs incurred: Factory Manager Salary $6,000 Factory Utilities 2,500 Machinery Deprecation 10,000 Machinery Repairs 2,...
On March 31, 2017, Alpha Corporation recorded the following factory overhead costs incurred: Factory Manager Salary $7,000 Factory Utilities 2,000 Machinery Deprecation 11,000 Machinery Repairs 2,...
Dunby Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single plantwide rate with direct labor hours as the allocation base. The estimated indirect...
Cretin Enterprises uses a predetermined overhead rate of $21.30 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $172,956 of total manufacturing overhead fo...
During 2015, Thompson Company applied overhead using a job-order costing system at a rate of $15 per direct labor hour. Estimated direct labor hours for the year were 110,000, and estimated overhea...
Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred DH 780,000 of overhead and estimated overhead was DH 735,000. What is Crain's predetermined ove...
During 2015, Wendy Company applied overhead using a job-order costing system at a rate of $16 per direct labor hour. Estimated direct labor hours for the year were 110,000, and estimated overhead f...
Ralston Gifts applies overhead on the basis of machine hours. The following data were provided by Ralston: Estimated annual overhead cost: $516,600 Actual annual overhead cost: $537,500 Estimated...
Activity based costing is recommended for the allocation of SG&A expenses in order to determine the true profitability of a product or a customer. True False
Activity-based costing can be used to allocate SG&A expenses in order to assist management with pricing and other marketing decisions. True False
Sirmons Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the lab...
Logan Products computes its predetermined overhead rate annually on the basis of direct labour-hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $574,...
Find examples of companies that use normal costing.
McKinley Industries estimated manufacturing overhead for the year at $290,000. Manufacturing overhead for the year was underapplied by $10,000. The company applied $235,000 to work in process. The...
The amount of overhead cost applied to jobs using an overhead rate always equals the actual overhead cost incurred. True False
Pyramid Company expects to incur $3,000,000 in manufacturing overhead costs this year. During the year, it expects to use 40,000 direct labor hours at a cost of $600,000 and 80,000 machine hours....
Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine-hours. At the beginning of the year, the company estimated its total overhead cost to be $269,800 and machine...
Osborn Manufacturing uses a predetermined overhead rate of $ 19.70 per direct labor- hour. This predetermined rate was based on a cost formula that estimates $265,950 of total manufacturing overhea...
Lisa Inc. estimates that its employees will utilize 200,000 direct labor hours during the coming year. Total overhead costs are estimated to be $6,700,000 and machine hours are estimated to be 100,...
During March 2019, Annapolis Corporation recorded $41,800 of costs related to factory overhead. Alpha's overhead application rate is based on direct labor hours. The preset formula for overhead app...
The Meyers CPA firm has the following overhead budget for the year: Overhead Indirect materials $ 480,000 Indirect labor 1,870,000 Depreciation--Building 329,000 Depreciation--Furniture 61,000 Ut...
The Jefferson Company made the following estimates for the current year: Overhead costs $425,000 Direct labor hours 85,000 If 15,000 hours of labor are actually worked in February, how much ove...
On March 31, 2019, Dorchester Corporation recorded the following factory overhead costs incurred: Factory Manager Salary $5,500 Factory Utilities 2,800 Machinery Deprecation 9,000 Machinery Repair...
During March 2019, Annapolis Corporation recorded $43,000 of costs related to factory overhead. Alpha's overhead application rate is based on direct labor hours. The preset formula for overhead app...
Avery Co. uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. For the month of October, Avery's estimated manufacturing overhead cost was $300,0...
During 2017, Bramble Corp. expected Job no. 59 to cost $300,000 of overhead, $440,000 of materials, and $200,000 in labor. Bramble applied overhead based on direct labor cost. Actual production req...
During March 2019, Alaska Corporation recorded $269,000 of costs related to factory overhead. Alaska's overhead application rate is based on direct labor hours. The preset formula for overhead appl...
Provide a journal entry from the information below to close the company's underapplied or overapplied overhead to Cost of Goods Sold. Harwood Company uses a job-order costing system that applies ov...
Harwood Company uses a job-order costing system that applies overhead cost to jobs on the basis of machine-hours. The company's predetermined overhead rate of $2.40 per machine-hour was based on a...
ABC Company listed the following data for the current year: Budgeted factory overhead $1,044,000 Budgeted direct labor hours 69,600 Budgeted machine hours 24,000 Actual factory overhead 1,037,400...
At the end of the year the Manufacturing Overhead account is closed into what account? (a) Work in Process (b) Finished Goods (c) Cost of Goods Sold (d) Manufacturing Overhead Control
At the end of the year, Easton Company had a balance in Manufacturing Overhead of $20,000, and a balance in Manufacturing Overhead Applied of $19,000. When the Manufacturing Overhead account is clo...
Wilson Enterprises applies overhead based on direct labor cost. The company estimates that their overhead for the year will be $240,000, and direct labor cost to be $300,000. Actual direct labor co...
During March 2019, Alaska Corporation recorded $230,000 of costs related to factory overhead. Alaska's overhead application rate is based on direct labor hours. The preset formula for overhead appl...
During March 2019, Antartica Corporation recorded $239,000 of costs related to factory overhead. Antartica overhead application rate is based on direct labor hours. The preset formula for overhead...
Before the year began, Butler Manufacturing estimated that manufacturing overhead for the year would be $ 176,100 and that $13,800 direct labor hours would be worked. Actual results for the year in...
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