Question : 120.Stalk Products has $27,000 of underapplied overhead at the end : 1302694

 

120.Stalk Products has $27,000 of underapplied overhead at the end of the year.Management has asked you what the impact on income will be if you prorate the underapplied overhead to the appropriate accounts.What will you tell them?

A.Income will be higher if the underapplied overhead is prorated than if it is closed to cost of goods sold.

B.Income will be lower if the underapplied overhead is prorated than if it is closed to cost of goods sold.

C.Income will be the same regardless of which method is used.

D.The answer depends on the reason that the underapplied exists.

 

121.If the amount of underapplied overhead is large in amount, it is

A.closed to Finished Goods.

B.apportioned between Raw Materials, Finished Goods, and Work in Process Inventory.

C.apportioned among Work in Process, Finished Goods,and Cost of Goods Sold.

D.closed to Cost of Goods Sold.

 

122.What is the impact of disposing any overapplied overhead between the appropriate accounts, if the amount is material?

A.It will increase cost of goods sold, decrease income, and reduce inventory.

B.It will reduce cost of goods sold, increase income, and increase inventory.

C.It will reduce cost of goods sold, increase income, and reduce inventory.

D.It will increase cost of goods sold, decrease income and increase inventory.

 

 

123.Factory Containers allocates overhead based on machine hours. Estimated overhead costs for the year total $68,000 and the company estimates that it will use 16,000 machine hours during the year. Actual overhead for the year was $62,250 and the company used 15,000 machine hours. If Job J33requires 420 machine hours, how much overhead will be allocated to Job J33?

A.$1,743

B.$1,904

C.$1,634

D.$1,785

 

124.King Manufacturing estimated manufacturing overhead costs to be $248,000 for the year, incurred manufacturing overhead costs of $251,000, and  applied overhead to jobs in the amount of$253,000. How muchisthe amount of overapplied or underapplied overhead?

A.$2,000 overapplied

B.$5,000 overapplied

C.$3,000 underapplied

D.$2,000 underapplied

 

125.Juarez, Inc. designs and manufactures custom cabinets. The company uses a job-order costing system, and the allocates overhead at $18per direct labor hour. Over or underapplied overhead is not material. During May, Juarez’s transactions included the following:

 

Direct labor cost incurred at$15an hour              $5,400

Manufacturing overhead cost incurred              6,800

Direct materials purchased               11,500

Raw materials inventory, beginning               160

Raw materials inventory, ending               280

Sales               23,000

Selling expenses               2,100

Work in process inventory, beginning               220

Work in process inventory, ending               250

 

How much is over or underapplied overhead for May?

A.$320 underapplied

B.$1,400 overapplied

C.$6,800 underapplied

D.More information is needed

 

126.Sandross,Inc. applies overhead based on direct labor cost using a job-order costing system. The company estimated the following annual amounts:

Estimated manufacturing overhead$42,000

Estimated direct labor1,600 hours at $15 per hour

 

Actual amounts for the year were:

Actual manufacturing overhead$44,000

Actual direct labor1,550 hours at $16 per hour

 

How much is over or underapplied overhead?

A.$600 underapplied

B.$2,000 underapplied

C.$3,313 underapplied

D.$1,419 underapplied

127.Elm Street Company incurred$440,000 direct labor costs this year.Manufacturing overhead was applied at a predetermined rate of $5.50 per direct labor hour.The average hourly wage rate was $16 per hour. If actual overhead incurred was $160,000, what was the amount of overapplied or underapplied overhead?

A.$151,250 underapplied

B.$8,750 underapplied

C.$27,500 overapplied

D.$151,250overapplied

 

128.Rivertown Products applied overhead to jobs at a rate of $10.00 per direct labor hour. If the budgeted manufacturing overhead was $660,000 and the actual manufacturing overhead incurred was $630,000, how much under or over applied overhead did Rivertownhave?

A.$30,000 underapplied

B.$30,000 overapplied

C.$60,000 overapplied

D.Information provided is not sufficient to derive the answer

 

129.Harvard Binding had budgeted direct labor costs of $870,000 andbudgeted manufacturing overhead of $304,500. It allocates manufacturing overhead based on direct labor costs.If actual direct labor costs were $840,000 and actual manufacturing overhead costs were $286,000, identify the true statement.

A.The company applied more overhead than it incurred.

B.The company estimated less overhead than it applied.

C.The company incurred more overhead than it estimated.

D.The company estimated more overhead than it applied.

 

 

130.Why is factory overhead ‘applied’ to products and jobs by manufacturing companies?

A.Actual overhead costs can never be accurately determined for jobs.

B.Managers prefer job costs to be exact in amount for budgeting purposes.

C.It allows managers more timely determination of product costs during the manufacturing process.

D.It provides a more accurate cost of the job or products being processed.