Chap 2 ACC 222

The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job.

False

In absorption costing, nonmanufacturing costs are assigned to units of product.

False (manufacturing)

The formula for computing the predetermined overhead rate is: Predetermined overhead rate = Estimated total amount of the allocation base ÷ Estimated total manufacturing overhead cost

False (switch the numerator and denomenator)

Most countries require some form of absorption costing for external reports.

True

The appeal of using multiple departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs.

True

The costs attached to products that have not been sold are included in ending inventory on the balance sheet.

True

The fact that one department may be labor intensive while another department is machine intensive explains in part why multiple predetermined overhead rates are often used in larger companies.

True

If a job is not completed at year end, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used.

false (year inccured)