1. Applied overhead of a company exceeds actual overhead when the a. Overhead ac

Question

1. Applied overhead of a company exceeds actual overhead when the

a.Overhead account has a credit balance

b. journal entry to account for the difference involves a debit to Cost of Goods Sold

c. Overhead account has a debit balance.

d. company has overspent in the overhead cost area.

2. Which of the following best describes the typical relationship between variable costs and volume?

a. Total variable costs increase in an erratic, unpredictable fashion with changes in volume.

b. Total variable costs stay constant with changes in volume

c.

Explanation / Answer

1) b. journal entry to account for the difference involves a debit to Cost of Goods Sold

2)d.

Total variable costs increase in direct proportion to increases in volume.

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