5) If factory overhead applied exceeds the actual costs, the factory overhead T

Question

5) If factory overhead applied exceeds the actual costs, the factory overhead              T        F                    account will have a credit balance.

6) The direct materials costs and direct labor costs incurred by a production                T         F

              department are referred to as conversion costs.

7) Generally accepted accounting principles require companies to use only                  T         F

            one factory overhead rate for product costing.

8) The document that serves as the basis for recording direct labor on a job                   T          F      cost sheet is the time ticket.

Explanation / Answer

5 True, If factory overhead applied exceeds the actual costs, the factory overheadaccount will have a credit balance. 6 False, The direct materials costs and direct labor costs incurred by a production department are not referred to as conversion costs. 7 False, generally accepted accounting principles require companies to use only one factory overhead rate for product costing 8 True, The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket

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