Question

1.If manufacturing overhead has been under-applied, which of the following is true: Select one: a. Revenue is understated b. Gross Profit is understated c. Cost of Goods Sold is overstated d. Gross Profit is overstated

2.

Costs of manufactured inventory items are transferred from Work-In-Process to Finished Goods Inventory when:

Select one:

a. Goods have been sold

b. Manufacturing overhead is applied

c. Direct materials are requisitioned

d. Goods are ready to be sold

3.

The payment of a plant manager's salary increases:

Select one:

a. Cost of Goods Sold

b. Wages Expense

c. Work in Process Inventory

d. Manufacturing Overhead

4.

When applying manufacturing overhead to jobs, the formula to calculate the amount is:

Select one:

a. Predetermined overhead rate times the actual units of allocation base

b. Predetermined overhead rate times the estimated units of allocation base

c. Predetermined overhead rate divided by the actual manufacturing overhead costs

d. Predetermined overhead rate times the actual manufacturing costs

5.

Crimp Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 15,000 hours and the total estimated manufacturing overhead was $258,000. At the end of the year, actual direct labor-hours for the year were 13,100 hours and the actual manufacturing overhead for the year was $253,000. Overhead at the end of the year was:

Select one:

a. $27,680 overapplied

b. $32,680 overapplied

c. $32,680 underapplied

d. $27,680 underapplied

Answer 1

Q1.
Answer is d. Gross Profit is overstated
Q2.
Answer is d. Goods are ready to be sold.
Q3.
Answer is d. manufacturing Overheads
Q4.
Answer is a. Pre-determined OH rate times the actual allocation unit base.
Q5.
Answer is d. $ 27680 underapplied
Explanation:
OH rate per DLH: 258000/15000 = $17.20 per DLH
Manufacturing OH incurred					253000
Manufacturing OH applied (13100 hrs @ 17.20)					225320
Under-applied Overheads					27680