Smartbook 4
The formula for a predetermined overhead rate is:
Estimated manufacturing overhead cost divided by estimated allocation base
The formula for applying overhead to a specific job is:
Predetermined overhead rate x Amount of allocation base incurred by job
Which of the following is not a manufacturing cost category?
Selling & administrative costs
Which of the following would not be a good allocation base for manufacturing overhead?
accounting hours
The process used to assign overhead costs to products is called overhead ___.
allocation
A measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n) ___ ___.
allocation base
Manufacturing overhead costs:
are indirect costs consist of many different items
Overhead application is the process of:
assigning manufacturing overhead cost to jobs
The predetermined overhead rate is calculated:
before the period begins
Costs assigned to units of product in absorption costing include _________ manufacturing costs.
both variable and fixed
Categories of manufacturing costs include ______.
direct materials, direct labor, manufacturing overhead
A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total amount of the allocation base.
estimated; estimated
Average manufacturing overhead cost per unit usually varies from one period to the next because:
fixed manufacturing overhead remains constant in total even when production changes
All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost under ___ costing.
full
The manufacturing overhead account contains:
many different kinds of indirect costs
An allocation base is a(n):
measure of activity used to assign overhead costs to products and services
Total manufacturing overhead costs tend to:
remain fairly constant
In the formula Y = a + bX, b represents the estimated:
variable manufacturing overhead cost per unit
Based on this information, the predetermined overhead rate per direct labor dollar is:
2
Based on this information, the predetermined overhead rate per direct labor hour is $
3
Murphy Manufacturing estimated total manufacturing overhead for 2017 to be $100,000 and uses direct labor-hours as the allocation base. They estimated that 5,000 hours would be used. Actual overhead for 2017 was $120,000 and actual direct labor-hours were 7,500. How much overhead was applied to a job completed during 2017 that used 200 direct labor-hours?
$4,000
Based on this information, the amount of overhead allocated to a job that used 300 direct labor hours is $___.
900
The average manufacturing overhead cost per unit tends to:
vary from one period to the next
Jones Company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for Job #420 listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost of Job #420 is:
2
Which of the following is an essential quality of an overhead allocation base?
It must be common to all the company's products and services.
Manufacturing overhead:
consists of many different types of costs is an indirect cost contains fixed costs
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find:
overhead applied to the job
In the formula Y = a + bX, X represents the estimated:
total amount of the allocation base`
To calculate the unit product cost using the job cost sheet:
divide the total job cost by the number of units produced
Widely used allocation bases in manufacturing are:
machine hours units of product direct labor hours direct labor cost