Question

What is the appropriate closing journal entry if the ending balance of MOH Control is $40,000, the ending balance of MOH Allocated is $35,000 and your company writes the over/under allocated overhead off to COGS?

	a.	Dr MOH Allocated 35,000 Dr COGS 5,000 Cr MOH Control 40,000
	b.	Dr MOH Control 35,000 Dr COGS 5,000 Cr MOH Allocated 40,000
	c.	Dr MOH Control 40,000 Cr MOH Allocated 40,000
	d.	Dr MOH Allocated 40,000 Cr MOH Control 35,000 Cr COGS 5,000

Goldberg's Book and Music Store has two service departments, Warehouse and Data Center. The store budgets the following amounts for its services departments in servicing each other and the two production departments of Books and Music:     

	Used By
Supplied By	Warehouse	Data Center	Books	Music
Warehouse	—	0.25	0.70	0.05
Data Center	0.20	—	0.45	0.35

If you are using the step down method to allocate support department costs which of the support departments would you allocate the costs from second based on percentage of use:

	a.	Music
	b.	Books
	c.	Data Centre
	d.	Warehouse

The more that costs share similar cost drivers, the:

	a.	less the amount of variable costs
	b.	fewer the number of cost pools needed
	c.	greater the number of cost pools needed
	d.	less accurate the costs of a particular cost object

Answer 1

What is the appropriate closing journal entry if the ending balance of MOH Control is $40,000, the ending balance of MOH Allocated is $35,000 and your company writes the over/under allocated overhead off to COGS?

Option a is correct i.e

.	Dr MOH Allocated 35,000 Dr COGS 5,000 Cr MOH Control 40,000

If you are using the step down method to allocate support department costs which of the support departments would you allocate the costs from second based on percentage of use:

Option d is correct i.e Data centre

The more that costs share similar cost drivers, the:

option B is correct i.e

b.	fewer the number of cost pools needed

Since they can be categorise into lesser categories