D196 Chap 6/7 Questions and Correct
Answers
What is actual manufacturing overhead? - Answer B. Manufacturing costs other than direct
materials and direct labor. Check
What is an indirect cost? - Answer Costs normally incurred for the benefit of several
segments within the organization.
What is overapplied manufacturing overhead? - Answer The excess of applied manufacturing
overhead costs over the actual manufacturing overhead costs for the period.
What is estimated manufacturing overhead? - Answer Budgeted manufacturing overhead
costs that are used to establish the predetermined overhead rate.
5 of 38
close
What is underapplied manufacturing overhead? - Answer The excess of actual
manufacturing overhead costs over the applied manufacturing overhead costs for the period.
What is the predetermined overhead rate? - Answer This is estimated manufacturing
overhead cost for the year divided by a total estimated activity base (such as machine hours,
direct labor hours, direct labor cost, and so forth).
What is applied manufacturing overhead? - Answer The amount of the manufacturing
overhead that is assigned to the goods produced.
Assembly line worker's wages are classified as - Answer Product Cost
Rubber for making bicycle tires - Answer Product Cost
Depreciation on office copy machine - Answer Period Cost
Depreciation on factory machinery - Answer Product Cost
Sales commissions - Answer Period Cost
, Indirect Materials - Answer Product Cost
Factory supervisor's salary - Answer Product Cost
Plant repair and maintenance costs - Answer Product Cost
Factory supplies - Answer Product Cost
Insurance policy on office building - Answer Period Cost
Insurance policy on factory building - Answer Product Cost
Office manager's salary - Answer Period Cost
Indirect labor - Answer Product Cost
Advertising expense - Answer period cost
Company President's salary - Answer period cost
Bright Future makes and sells class rings for local schools. Operating information is as follows:
Selling price per ring $750 Variable cost per ring 300 Total fixed costs $450,000 Calculate
Contribution Margin per Unit.
Calculate Contribution Margin per Unit
$750
$450
$350
$400 - Answer CM=Sales-Variable Costs 750-300=450
Bright Future makes and sells class rings for local schools. Operating information is as follows:
Selling price per ring $750 Variable cost per ring 300 Total fixed costs $450,000 Calculate
Contribution Margin Ratio
60%
40% - Answer CM Ratio=CM/Sales 450/750=.60
Answers
What is actual manufacturing overhead? - Answer B. Manufacturing costs other than direct
materials and direct labor. Check
What is an indirect cost? - Answer Costs normally incurred for the benefit of several
segments within the organization.
What is overapplied manufacturing overhead? - Answer The excess of applied manufacturing
overhead costs over the actual manufacturing overhead costs for the period.
What is estimated manufacturing overhead? - Answer Budgeted manufacturing overhead
costs that are used to establish the predetermined overhead rate.
5 of 38
close
What is underapplied manufacturing overhead? - Answer The excess of actual
manufacturing overhead costs over the applied manufacturing overhead costs for the period.
What is the predetermined overhead rate? - Answer This is estimated manufacturing
overhead cost for the year divided by a total estimated activity base (such as machine hours,
direct labor hours, direct labor cost, and so forth).
What is applied manufacturing overhead? - Answer The amount of the manufacturing
overhead that is assigned to the goods produced.
Assembly line worker's wages are classified as - Answer Product Cost
Rubber for making bicycle tires - Answer Product Cost
Depreciation on office copy machine - Answer Period Cost
Depreciation on factory machinery - Answer Product Cost
Sales commissions - Answer Period Cost
, Indirect Materials - Answer Product Cost
Factory supervisor's salary - Answer Product Cost
Plant repair and maintenance costs - Answer Product Cost
Factory supplies - Answer Product Cost
Insurance policy on office building - Answer Period Cost
Insurance policy on factory building - Answer Product Cost
Office manager's salary - Answer Period Cost
Indirect labor - Answer Product Cost
Advertising expense - Answer period cost
Company President's salary - Answer period cost
Bright Future makes and sells class rings for local schools. Operating information is as follows:
Selling price per ring $750 Variable cost per ring 300 Total fixed costs $450,000 Calculate
Contribution Margin per Unit.
Calculate Contribution Margin per Unit
$750
$450
$350
$400 - Answer CM=Sales-Variable Costs 750-300=450
Bright Future makes and sells class rings for local schools. Operating information is as follows:
Selling price per ring $750 Variable cost per ring 300 Total fixed costs $450,000 Calculate
Contribution Margin Ratio
60%
40% - Answer CM Ratio=CM/Sales 450/750=.60
