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If manufacturing overhead is underapplied, then: A) actual manufacturing overhea

ID: 2543734 • Letter: I

Question

If manufacturing overhead is underapplied, then:

A) actual manufacturing overhead cost is less than estimated manufacturing overhead cost.

B) the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred.

C) the predetermined overhead rate is too high.

D) the Manufacturing Overhead account will have a credit balance at the end of the year.

When computing the cost per equivalent unit, the weighted-average method of process costing considers:

A) costs incurred during the current period only.

B) costs incurred during the current period plus cost of ending work in process inventory.

C) costs incurred during the current period plus cost of beginning work in process inventory.

D) costs incurred during the current period less cost of beginning work in process inventory.

How would the following costs be classified (product or period) under variable costing at a retail clothing store?

Cost of purchasing clothing

Sales commissions

Product

Product

Product

Period

Period

Product

Period

Period

Cost of purchasing clothing

Sales commissions

Product

Product

Product

Period

Period

Product

Period

Period

Explanation / Answer

1 If manufacturing overhead is underapplied then the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred. 2 Costs incurred during the current period plus cost of beginning work in process inventory. 3 Cost of purchasing clothing-Product Sales commissions -Period

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