Exam 13: Accounting for Overhead Costs

Choosing direct-labor cost rather than direct-labor hours as a cost driver for overhead implies that_____.

A company has the following information for the current month of operations: Raw materials used \ 37,500 Sales \ 97.50 per unit) \ 136,500 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 _____ units were sold during the period.

The variable-costing method does not include fixed overhead in a product's cost.

Royalton 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 materials 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 gross profit under absorption costing is_____.

The budgeted total overhead divided by the budgeted cost-driver activity

In an absorption-costing statement, revenue less variable manufacturing cost is the gross margin.

Pearl 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 materials 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 goods sold under absorption costing is_____.

The fixed-overhead rate is determined by dividing the budgeted fixed manufacturing overhead by_____.

The budgeted factory-overhead rate is computed as _____.

An absorption-costing income statement separates cost into the major categories of_____.

Most companies consider production-volume variances to be beyond immediate control.

Fixed manufacturing overhead is excluded from the cost of products under absorption costing.

There is no production-volume variance only when expected production volume equals actual production volume.

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 total contribution margin under variable costing is_____.

An unfavorable production-volume variance decreases the manufacturing costs shown on the income statement.

Iowa 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 contribution margin under variable costing is_____.

If the overhead control account has a credit balance at the end of the period, then overhead is _____.

When the amount of overhead applied to the product exceeds the amount incurred by the department, the difference is called overapplied overhead.

Mets Company had the following information: Budgeted variable factory overhead \ 66,000 Budgeted fixed factory overhead \ 46,500 Actual variable factory overhead \ 70,500 Actual fixed factory overhead \ 55,500 Budgeted cost-driver activity levels: Direct-labor hours 32,000 Direct-labor costs \ 150,000 Machine hours 60,000 Production setups 15,000 Actual cost-driver activity level s: Direct-labor hours 31,500 Direct-labor costs \ 165,600 Machine hours 56,190 Production setups 14,280 The budgeted factory-overhead rate using direct-labor hours as the cost driver is _____.

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 ending inventory under variable costing is_____.