34 Questions
What is the total overhead applied to a product that uses 6 machine hours in machining and has a direct-labor cost of $40 in assembly?
$64
If Enriquez used 70,000 machine hours in Machining, how much overhead was applied to Machining?
$280,000
If Enriquez had incurred $190,000 in direct labor cost, how much overhead was applied to Assembly?
$95,000
What are overhead rates used for?
To apply overhead based on actual events
How is total overhead applied to a product calculated?
Budgeted overhead rates multiplied by actual machine hours or labor cost used
In the Enriquez Machine Parts Company, what is selected as the cost allocation base for applying overhead in the machining department?
Machine hours
What is the formula used to calculate total overhead applied to a product?
Actual machine hours or labor cost used multiplied by budgeted overhead rates
If a product uses 5 machine hours and has a direct labor cost of $40, how much overhead would be applied according to the given illustration?
$44
If Enriquez had used 70,000 machine hours in machining, how much overhead was applied to machining?
Not provided
What are budgeted overhead application rates based on?
Estimates
What are budgeted overhead application rates?
Budgeted overhead application rates are estimates used to apply overhead based on actual events.
How is total overhead applied to a product calculated?
Total overhead applied to a product equals budgeted overhead rates multiplied by actual machine hours or labor cost used by that product.
In the Enriquez Machine Parts Company, what cost-allocation base is used in the machining department?
The cost-allocation base used in the machining department is machine hours.
How much overhead would be applied to a product that uses 6 machine hours in machining and has direct-labor cost of $40 in assembly?
$44 of overhead would be applied to the product.
If Enriquez had incurred $190,000 in direct labor cost at the end of the year, what does this represent?
This represents the total direct labor cost incurred by Enriquez in the year.
If Enriquez had used 70,000 machine hours in the machining department, what does this indicate?
This indicates the total machine hours utilized by Enriquez in machining throughout the year.
What are the two main cost-allocation bases used in the Enriquez Machine Parts Company?
The two main cost-allocation bases are machine hours in machining and direct-labor in assembly.
What are budgeted overhead application rates used for?
To apply overhead based on actual events
How is total overhead applied to a particular product calculated?
Budgeted overhead rates multiplied by actual machine hours or labor cost used by that product
In Enriquez Machine Parts Company, what cost-allocation base is used for applying overhead in the machining department?
Machine hours
What is the total overhead applied to a product that uses 5 machine hours in machining and has a direct-labor cost of $40 in assembly?
$44
If Enriquez used 70,000 machine hours in Machining, how much overhead was applied to Machining?
Amount not specified in the text
What is the formula for calculating total overhead applied to a product?
Budgeted overhead rates x actual machine hours/labor cost used
Why are overhead application rates considered estimates?
Because they are budgeted rates
What will the total factory overhead applied amount to if the machining overhead is $280,000 and assembly overhead is $95,000?
$375,000
What will happen to the $375,000 estimate of Enriquez's overhead for the year?
It will become part of the cost of goods sold expense on Enriquez's income statement when the units produced are subsequently sold.
What is the total factory overhead applied if the machining overhead is $280,000 and assembly overhead is $95,000?
$375,000
When will the $375,000 estimate of Enriquez's overhead for the year become part of the cost of goods sold expense?
When the units produced are subsequently sold.
What is the significance of the $375,000 estimate of Enriquez's overhead?
It is an estimate of Enriquez's overhead for the year.
Where will the $375,000 estimate of Enriquez's overhead appear?
On Enriquez's income statement as part of the cost of goods sold expense.
What is the total factory overhead applied if machining overhead is $280,000 and assembly overhead is $95,000?
$375,000
How is the $375,000 estimate of Enriquez's overhead related to the cost of goods sold?
It will become part of the cost of goods sold expense when units produced are sold.
What will the $375,000 estimate of Enriquez's overhead represent on the income statement?
A part of the cost of goods sold expense.
What is the importance of the $375,000 estimate of Enriquez's overhead?
It is an estimation of Enriquez's overhead costs for the year.
Test your knowledge on overhead application illustrations in the Canvas student module. Questions cover topics such as total budgeted rate, amount of cost driver, and cost-allocation methods in departments.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
