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31 predetermined overhead rates are necessary because cost accountants use periodic 4299496

 

31. Predetermined overhead rates are necessary because cost accountants use periodic inventory systems. 

32. The predetermined overhead allocation rate based on direct labor cost is the ratio of estimated overhead cost for the period to estimated direct labor cost for the period. 

33. In a job order cost accounting system, indirect labor costs are debited to the Factory Overhead account. 

34. Since a predetermined overhead allocation rate is established before a period begins, this rate is revised many times during the period to compensate for inaccurate estimates previously made. 

35. Under a job order cost accounting system, individual jobs are always charged with actual overhead costs when they are transferred to finished goods. 

36. Overapplied overhead is the amount by which actual overhead cost exceeds the overhead applied to products during the period. 

37. In a job order cost accounting system, any immaterial underapplied overhead at the end of the period can be charged entirely to Cost of Goods Sold. 

38. If actual overhead incurred during a period exceeds applied overhead, the difference will be a credit balance in the Factory Overhead account at the end of the period. 

39. The Factory Overhead account will have a credit balance at the end of a period if overhead applied during the period is greater than the overhead incurred. 

40. Any material amount of under- or overapplied factory overhead must always be closed to Cost of Goods Sold at the end of an accounting period. 

 

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