Question 1

The following information was gathered for the Gophers Company:  Assume the cost driver for factory overhead costs is direct labor hours.What is the amount of overapplied or underapplied overhead?

Accepted Answer

A) $2,730 underapplied 
B) $2,730 overapplied 
C) $3,920 underapplied 
D) $3,920 overapplied

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Rocky Company had the following information:  Assume production setups are the cost driver for factory overhead costs.The budgeted factory overhead rate is ________.

Accepted Answer

A) $6.25 per setup 
B) $6.52 per setup 
C) $6.78 per setup 
D) $7.50 per setup

Question 4

Ohio Company reported the following information about the production and sale of its only product during the first month of operations:  Under variable costing,the cost of finished goods ending inventory is ________.

Accepted Answer

A) $64,000 
B) $68,000 
C) $80,000 
D) $90,000

Question 5

Product costs for absorption costing include direct materials,direct labor and ________.

Accepted Answer

A) fixed manufacturing overhead costs 
B) variable manufacturing overhead costs 
C) fixed and variable selling costs 
D) fixed and variable manufacturing overhead costs

Question 6

The variable-costing income statement separates costs into fixed costs and variable costs.

Accepted Answer

A) True 
 B)False

Question 7

The immediate write-off method of disposing of underapplied overhead subtracts the dollar amount from Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Exam 13: Accounting for Overhead Costs

The following information was gathered for the Gophers Company: Assume the cost driver for factory overhead costs is direct labor hours.What is the amount of overapplied or underapplied overhead?

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

Rocky Company had the following information: Assume production setups are the cost driver for factory overhead costs.The budgeted factory overhead rate is ________.

Ohio Company reported the following information about the production and sale of its only product during the first month of operations: Under variable costing,the cost of finished goods ending inventory is ________.

Product costs for absorption costing include direct materials,direct labor and ________.

The variable-costing income statement separates costs into fixed costs and variable costs.

The immediate write-off method of disposing of underapplied overhead subtracts the dollar amount from Cost of Goods Sold.