Exam 13: Accounting for Overhead Costs

An unfavorable production volume variance ________ a company's operating income.

The excess of applied overhead costs over the actual overhead costs is called ________.

Steve Harvey Company uses absorption costing and reports the following information: Variances Production Volume Variance \ 70,000 Unfavorable Flexible Budget Variance for Fixed Factory Overhead \ 100,000 Unfavorable Flexible Budget Variance for Variable Overhead \ 40,000 Favorable Flexible Budget Variance for Direct Materials \ 20,000 Favorable Before consideration of the above variances,the company has operating income of $1,500,000.What is the operating income after considering the above variances?

Under absorption costing,fixed overhead costs applied to products will be included in ________.

If a company uses the variable-costing approach,a manager may be tempted to produce unneeded units to increase operating income.

When the actual production volume exceeds the expected production volume,fixed overhead is underapplied.

Under the immediate write-off method of disposing of underapplied or overapplied overhead costs,current net income is ________ by underapplied overhead costs and current net income is ________ by overapplied overhead costs.

Absorption costing assigns ________ to the product.

When calculating the budgeted overhead rate,the numerator of the fraction is the actual amount of the cost driver.

When sales exceed production,variable-costing income is greater than absorption-costing income.

Jorgensen Company reported the following information about the production and sale of its only product during the first month of operations: Selling price per unit \ 300 Sales \ 480,000 Direct materials used \ 220,000 Direct labor \2 00,000 Variable factory overhead \6 0,000 Fixed factory overhead \8 0,000 Variable selling and administrative expenses \2 0,000 Fixed selling and administrative expenses \ 10,000 Ending inventory, Direct Materials 0 Ending inventory, Work-in-process 0 Ending inventory, Finished Goods 400 units Under variable costing,the contribution margin is ________.

Fixed factory overhead costs appear on the absorption-costing income statements as ________.

Dodge Company had the following information: Budgeted factory overhead costs \ 90,000 Actual factory overhead costs \8 2,000 Budgeted machine hours 40,000 Actual machine hours 35,500 Assume machine hours are the cost driver of factory overhead costs.The budgeted factory overhead rate is ________.

Comerowski Industries Inc.reported the following information about the production and sale of its only product during the first month of operations: Selling price per unit \1 00.00 Sales \1 00,000 Direct materials used \ 37,000 Direct labor \3 6,000 Variable factory overhead \2 5,000 Fixed factory overhead \2 0,000 Variable selling and administrative expenses \2 ,000 Fixed selling and administrative expenses \ 7,500 Ending inventory, Direct Materials 0 Ending inventory, Work-in-process 0 Ending inventory, Finished Goods 1,200 units Under variable costing,what is the total contribution margin?

The following data are available for Atkinson Company for the year ended December 31,2015: Sales 38,000 units Sales price \ 50 per unit Actual variable manufacturing costs \ 1,400,000 Actual fixed manufacturing costs \ 228,000 Actual variable nonmanufacturing costs \ 76,000 Actual fixed nonmanufacturing costs \ 135,000 Work-in-process inventory, January 1, 2015 0 Finished goods inventory, January 1, 2015 0 Direct materials inventory, January 1, 2015 0 Work-in-process inventory, December 31,2015 0 Direct materials inventory, December 31,2015 0 Expected production 40,000 units Actual production 40,000 units Required: A) Using the variable-costing approach, prepare an income statement for the year ended December 31, 2015. Assume actual fixed costs were equal to budgeted fixed costs. B) Using the absorption-costing approach, prepare an income statement for the year ended December 31, 2015. Assume actual fixed costs were equal to budgeted fixed costs.

The fixed overhead spending variance is also called the ________ variance.

Stelloh Company reported the following information about the production and sale of its only product during the first month of operations: Selling price per unit \ 65 Sales \7 8,000 Direct materials used \ 25,000 Direct labor \3 5,000 Variable factory overhead \1 5,000 Fixed factory overhead \1 0,000 Variable selling and administrative expenses \3 ,000 Fixed selling and administrative expenses \ 5,000 Ending inventory, Direct Materials 0 Ending inventory, Work-in-process 0 Ending inventory, Finished Goods 1,200 units Under variable costing,what is the product cost per unit?

Kingsway Company had the following information available for the past quarter: Budgeted factory overhead costs \7 5,000 Actual factory overhead costs \8 0,000 Budgeted direct labor hours 20,000 Actural direct labor hours 21,000 Assume the cost driver for factory overhead costs is direct labor hours and a job uses 2,000 direct labor hours.The job was budgeted to use 2,100 direct labor hours.What amount of factory overhead is applied to the job?

The overhead cost applied to a job is equal to the budgeted overhead rate times the budgeted amount of the cost driver.

A company can increase the accuracy of its product cost information by converting indirect costs to direct costs.