Exam 13: Accounting for Overhead Costs

The variable-costing income statement separates costs into manufacturing and nonmanufacturing categories.

Indiana Company reported the following information about the production and sales of its only product during its first month of operations: Sales \ 225 per unit) \ 360,000 Direct materi als used \ 176,000 Direct labor \ 100,000 Variable factory overhead \ 44,000 Fixed factory overhead \ 80,000 Variable selling and administrative expenses \ 20,000 Fixed selling and administrative expenses \ 10,000 Ending inventories: Direct materials -0- WIP -0- Finished goods 400 units The cost of producing one unit of product using variable costing is_____.

Ohio Company reported the following information about the production and sales of its only product during its first month of operations: Sales \ 225 per unit) \ 360,000 Direct materi als used \ 176,000 Direct labor \ 100,000 Variable factory overhead \ 44,000 Fixed factory overhead \ 80,000 Variable selling and administrative expenses \ 20,000 Fixed selling and administrative expenses \ 10,000 Ending inventories: Direct materials -0- WIP -0- Finished goods 400 units The ending inventory under variable costing is_____.

A company has the following information for the current month of operations: Raw materials used \ 37,500 Sales \ 97.50 per unit) \ 117,000 Direct labor \ 63,000 Variable factory overhead \ 25,500 Fixed factory overhead unknown Variable selling and administrative \ 4,500 Fixed selling and administrative \ 7,500 Gross profit \ 45,000 Contribution margin unknown Inventories: Beginning Ending Raw materials 0 \ 10,500 WIP 0 none Finished goods 0 1,200 units The ending inventory under variable costing is_____.

The variable-costing income statement uses the contribution-approach format.

The following information was gathered for White Sox Company: Budgeted direct-labor hours 34,000 Actual direct-labor hours 32,400 Budgeted factory overhead \ 144,500 Actual factory overhead \ 155,980 Assume the cost driver is direct-labor hours.The amount of factory overhead applied is _____.

The proration method assigns underapplied overhead and overapplied overhead amounts based on the beginning-of-year account balances of WIP, Finished Goods, and Cost of Goods Sold.

The excess of overhead applied to products over actual overhead incurred

Budgeted factory-overhead rate = total budgeted factory overhead / total actual amount of the cost driver.

Kings Company had the following information: Budgeted factory overhead \ 75,000 Actual factory overhead \ 80,000 Budgeted: Direct-labor hours 20,000 Actual: Direct-labor hours 21,000 The amount of overhead applied to a company that uses 2,000 direct-labor hours is _____.

A company has the following information for its first month of operations: Raw materials used \ 25,000 Sales \ 65 per unit) \ 91,000 Direct labor \ 42,000 Variable factory overhead \ 17,000 Fixed factory overhead unknown Variable selling and administrative \ 3,000 Fixed selling and administrative \ 5,000 Gross profit \ 30,000 Contribution margin unknown Ending inventories: Raw materials \ 7,000 WIP none Finished goods 1,200 units _____ units were produced during the period.

A company has the following information for its first month of operations: Raw materials used \ 25,000 Sales \ 65 per unit) \ 78,000 Direct labor \ 42,000 Variable factory overhead \ 17,000 Fixed factory overhead unknown Variable selling and administrative \ 3,000 Fixed selling and administrative \ 5,000 Gross profit \ 30,000 Contribution margin unknown Ending inventories: Raw materials \ 7,000 WIP none Finished goods 1,200 units The cost of goods sold under variable costing is_____.

The following information was gathered for Red Sox Company: Budgeted direct-labor hours 34,000 Actual direct-labor hours 30,400 Budgeted factory overhead \ 144,500 Actual factory overhead \ 151,980 Assume the cost driver is direct-labor hours.The budgeted factory-overhead rate is _____.

_____ is are) used for external reporting.

Accountants use actual overhead rates to apply overhead to jobs as they are completed.

Provide reasons for differences between the amounts of incurred and applied overhead.

A company has the following information for the current month of operations: Raw materials used \ 37,500 Sales \ 97.50 per unit) \ 117,000 Direct labor \ 63,000 Variable factory overhead \ 25,500 Fixed factory overhead unknown Variable selling and administrative \ 4,500 Fixed selling and administrative \ 7,500 Gross profit \ 45,000 Contribution margin unknown Inventories: Beginning Ending Raw materials 0 \ 10,500 WIP 0 none Finished goods 0 1,400 units _____ units were produced during the period.

Fixed factory overhead appears on the absorption-costing income statement as_____.

The production-volume variance is the difference between_____.

There is no difference between variable-costing and absorption-costing income if there is no_____.