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Activity-based overhead rate = Estimated Overhead / Estimated use of cost driver
Cost drivers are different for different kinds of Activities, The above formula is applied to all indirect costs whether it is administrative costs, Manufacturing overhead costs, selling cost or any other indirect costs. For example
a) Machine setups - Number of setups
b) Machine maintenance- Number of Machine hours
c) Purchasing department = Number of purchase orders
For example Company's estimated Machine setup costs are $100,000 and number of setups required = 1000, Cost driver rate = $100,000 / 1000 = $100 per setup
So, Activity based overhead rate is computed by the estimated overhead divided by the estimated use of cost drivers.
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QUESTION 3 An activity-based overhead rate is computed as follows: actual overhead divided by actual use...
Moving to the next question prevents changes to this answer. Question 10 A manufacturing process requires...
Moving to the next question prevents changes to this answer. Question 10 A manufacturing process requires small amounts of glue. The glue used in the production process is classified as ain) period cost. indirect material. direct material miscellaneous expense. A Moving to the next question changes to this answer Question 15 An activity-based overhead rate is computed as follows: actual overhead divided by actual use of cost drivers. estimated overhead divided by actual use of cost drivers. actual overhead divided...
If the overhead rate is computed annually based on the actual costs and activity for the...
If the overhead rate is computed annually based on the actual costs and activity for the year, the manufacturing overhead assigned to any particular job can be computed as soon as the job is completed True or False True False
Owlet distractors inc. uses activity-based costing to determine product costs. Activity rates computed at the beginning...
Owlet distractors inc. uses activity-based costing to determine product costs. Activity rates computed at the beginning of the year are used to apply manufacturing overhead costs to products. The following data concerning its activity-based costing system has been provided. Estimated overhead and activity rates, at the beginning of the year were: Estimated Expected Activity cost pools Overhead cost Activity Machine related (Machine hours) $431,200 16,000 MHs Batch setup (setups) $661,500 21,000 setups General factory (direct labor-hours) $612,150 26,500 DLHs The...
both questions plz Under job order costing, the predetermined overhead rate equals: Estimated overhead divided by...
both questions plz
Under job order costing, the predetermined overhead rate equals: Estimated overhead divided by the number of months in the period Actual overhead divided by actual direct labor hours Actual overhead minus estimated overhead Actual overhead multiplied by the actual activity level for a period Estimated overhead divided by the estimated activity level for a period D la 2 19 Under job order costing, the overhead variance is underapplied if: actual overhead is less than applied overhead O...
When calculating the predetermined manufacturing overhead rate, what is the correct formula? Estimated overhead costs divided...
When calculating the predetermined manufacturing overhead rate, what is the correct formula? Estimated overhead costs divided by the number of days in a year Estimated amount of the cost driver divided by the estimated total overhead costs Actual overhead costs of the prior year divided by the actual amount of the cost driver Estimated overhead costs divided by the estimated amount of the cost driver Estimated overhead costs divided by the actual amount of the cost driver Actual overhead costs...
QUESTION 12 The predetermined overhead rate is based on the relationship between estimated annual costs and...
QUESTION 12 The predetermined overhead rate is based on the relationship between estimated annual costs and actual activity estimated annual costs and estimated annual activity actual monthly costs and actual annual activity estimated monthly costs and actual monthly activity QUESTION 13 During 2017, Cotte Manufacturing expected Job No 59 to cost $300,000 of overhead, 5500,000 of materials, and $200,000 in labor Cotte applied overhead based on direct labor cost. Actual production required an overhead cost of $295.000 5570.000 in materials...
HOW WOULD I RESPOND TO THESE? - The predetermined overhead rate is based on the relationship...
HOW WOULD I RESPOND TO THESE? - The predetermined overhead rate is based on the relationship between estimated annual overhead costs and estimated annual operating activity, expressed in terms of a common activity base. The company may state the activity in terms of direct labor costs, direct labor hours, machine hours, or any other measure that provides an equitable basis for applying overhead costs to jobs. Companies establish the predetermined overhead rate at the beginning of the year. The formula...
an item called the When the predetermined overhead rate is based on the expense on income...
an item called the When the predetermined overhead rate is based on the expense on income statements prepared for internal management use. may appear to be treated as a period level of estimated activity, cost of excess capacity level of activity at capacity: cost of unused capacity actual overhead for the period; underapplied overhead cost estimated overhead for the period; overapplied overhead cost
The predetermined overhead rate is determined as: Estimated overhead costs divided by estimated allocation base (eg...
The predetermined overhead rate is determined as: Estimated overhead costs divided by estimated allocation base (eg direct labor hours) Actual overhead cost divided by estimated allocation base (eg direct labor hours) Estimated overhead Costs divided by actual allocation base (eg actual direct labor hours) actual overhead costs divided by actual allocation base (eg actual direct labor hours) Do not cost their services using job costing techniques True O False The beginning in Finished Goods Inventory is $50,000, the ending balance...
Brenot Corporation uses activity-based costing to determine product costs for external financial reports. Activity rates computed...
Brenot Corporation uses activity-based costing to determine product costs for external financial reports. Activity rates computed at the beginning of the year are used to apply manufacturing overhead costs to products. The company has provided the following data concerning its activity-based costing system. The data used to develop activity rates were: Activity Cost Pools Estimated Overhead Cost Expected Activity Machine related (machine-hours) $379,600 13,000 MHs Batch setup (setups) $1,144,800 27,000 setups General factory (direct labor-hours) $420,500 29,000 DLHs The actual...
Moving to the next question prevents changes to this answer. Question 10 A manufacturing process requires small amounts of glue. The glue used in the production process is classified as ain) period cost. indirect material. direct material miscellaneous expense. A Moving to the next question changes to this answer Question 15 An activity-based overhead rate is computed as follows: actual overhead divided by actual use of cost drivers. estimated overhead divided by actual use of cost drivers. actual overhead divided...
If the overhead rate is computed annually based on the actual costs and activity for the year, the manufacturing overhead assigned to any particular job can be computed as soon as the job is completed True or False True False
both questions plz
Under job order costing, the predetermined overhead rate equals: Estimated overhead divided by the number of months in the period Actual overhead divided by actual direct labor hours Actual overhead minus estimated overhead Actual overhead multiplied by the actual activity level for a period Estimated overhead divided by the estimated activity level for a period D la 2 19 Under job order costing, the overhead variance is underapplied if: actual overhead is less than applied overhead O...
QUESTION 12 The predetermined overhead rate is based on the relationship between estimated annual costs and actual activity estimated annual costs and estimated annual activity actual monthly costs and actual annual activity estimated monthly costs and actual monthly activity QUESTION 13 During 2017, Cotte Manufacturing expected Job No 59 to cost $300,000 of overhead, 5500,000 of materials, and $200,000 in labor Cotte applied overhead based on direct labor cost. Actual production required an overhead cost of $295.000 5570.000 in materials...
an item called the When the predetermined overhead rate is based on the expense on income statements prepared for internal management use. may appear to be treated as a period level of estimated activity, cost of excess capacity level of activity at capacity: cost of unused capacity actual overhead for the period; underapplied overhead cost estimated overhead for the period; overapplied overhead cost
The predetermined overhead rate is determined as: Estimated overhead costs divided by estimated allocation base (eg direct labor hours) Actual overhead cost divided by estimated allocation base (eg direct labor hours) Estimated overhead Costs divided by actual allocation base (eg actual direct labor hours) actual overhead costs divided by actual allocation base (eg actual direct labor hours) Do not cost their services using job costing techniques True O False The beginning in Finished Goods Inventory is $50,000, the ending balance...
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