The rate established prior to the beginning of a period that uses estimated over
ID: 2482881 • Letter: T
Question
The rate established prior to the beginning of a period that uses estimated overhead and an allocation factor such as estimated direct labor, and that is used to assign overhead cost to jobs is the: Predetermined overhead rate. Overhead variance rate. Estimated labor cost rate. Chargeable overhead rate. Miscellaneous overhead rate. Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Kayak Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied $6,000. The overhead application rate was: Percent The B&T; Company's production costs for May are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. B&T; Company's factory overhead incurred for May is:. if overhead applied is less than actual overhead incurred, it is: Fully applied. Underapplied. Overapplied. Expected. Normal. Define Conversion CostsExplanation / Answer
Ques. 38 - (a) Predetermined Overhead rate.
Ques. 39 = Overhead applied / Direct labor cost
= 6,000 / 30,000
= 20%
Ques. 40 = Company’s factory overhead incurred –
Indirect labor $6,500
Property tax on production equipment $800
Light & Power $1,000
Insurance on Plant & Equipment $200
Total $8,500
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Ques. 41 - Underapplied
Ques. 42 Conversion cost is the cost incurred on direct labor and overheads.
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