The predetermined manufacturing overhead rate is usually computed: A) During the financial year B) When overheads have been incurred C)At the beginning of financial year D)At the end of financial year.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Select the correct answer
The predetermined manufacturing overhead rate is usually computed:
A) During the financial year
B) When
C)At the beginning of financial year
D)At the end of financial year.
The traditional cost drivers used in computing overhead absorption rates are:
A)Direct labor hours, machine hours, direct labor costs
B)Direct labor hours, machine costs, direct labor cost
C)Floor space, rent & rates, machinery value
D)Direct labor costs, machine hours, factory overhead.
Overheads applied are calculated by:
A)Cost driver divided by the OAR
B)Budgeted production overheads divided by the budgeted cost driver activity
C)OAR times the actual cost driver activity
D)OAR times the estimated cost driver activity.
Under allocated manufacturing overhead costs are always the result of which of the following situations.
A)Estimated overhead costs are greater than actual overhead costs
B)Applied overhead costs are less than actual overhead costs
C)Actual overhead costs are greater than estimated overhead costs
D)Actual overhead costs are less than applied overhead costs.
The centrepiece of a job-costing system is the:
A)Job-cost sheet
B)Materials requisition form
C)Budgeted overhead rate
D)Labor time ticket
The following data relates to Bermuda Company for the year 2016
Estimated
Estimated direct labor cost $300,000
Estimated direct labor hours $ 30,000
Actual manufacturing overhead cost $289,000
Actual direct labor costs $315,000
Actual direct labor hours $ 33,000
Allocation base direct labor hours
Manufacturing overhead allocated for 2016 is:
A)$450,450
B)$264,000
C)$252,000
D)$220,500
The following data relates to Bermuda Company for the year 2016
Estimated manufacturing overhead cost $240,000
Estimated direct labor cost $300,000
Estimated direct labor hours $ 30,000
Actual manufacturing overhead cost $289,000
Actual direct labor costs $315,000
Actual direct labor hours $ 33,000
Allocation base direct labor hours
The manufacturing overhead variance for 2016 is:
A)$49,000 under applied
B)$25,000 under applied
C)$2900 over applied
D)$25,000 over applied.
Wright Brothers is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the year ended Dec 31, 2007.
Estimated labor cost $449,500
Actual direct labor cost $441,000
Estimated manufacturing overhead $359,600
Actual manufacturing overhead costs $338,000
Actual direct labor hours $242,000
The OAR when using direct labor hours as the cost driver is:
A)145% of direct labor costs
B)$1.81 per direct labor hour
C)$1.45 per direct labor hour
D)$1.49 per direct labor hour
Wright Brothers is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the year ended Dec 31, 2007.
Estimated labor cost $449,500
Actual direct labor cost $441,000
Estimated manufacturing overhead $359,600
Actual manufacturing overhead costs $338,000
Actual direct labor hours $242,000
Manufacturing overhead applied based on direct labor cost is
A)$352,800
B)$359,600
C)$360,000
D)$348,480
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