ACC 604 ACC604 Chapter 4 Homework Answers (National University)

ACC 604 ACC604 Chapter 4 Homework Answers (National University)


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ACC 604 ACC/604 ACC604 Homework Chapter 4 Solutions (National University)

Chapter 4


1. Why aren’t actual manufacturing overhead costs traced to jobs just as direct materials and direct labor costs are traced to jobs?

2. What is the purpose of the job cost sheet in a job-order costing system?

3. What is a predetermined overhead rate, and how is it computed?

4. Explain how a sales order, a production order, a materials requisition form, and a labor time ticket are involved in producing and costing products.

5. Explain why some production costs must be assigned to products through an allocation process.

6. Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs?

7. What factors should be considered in selecting a base to be used in computing the predetermined overhead rate?

8. If a company fully allocates all of its overhead costs to jobs, does this guarantee that a profit will be earned for the period?

9. Would you expect the amount of overhead applied for a period to equal the actual overhead costs of the period? Why or why not?

10. What is underapplied overhead? Overapplied overhead? What disposition is made of these amounts at the end of the period?

11. Provide two reasons why overhead might be underapplied in a given year.

12. What adjustment to cost of goods sold is made for underapplied overhead? What adjustment is made for overapplied overhead?

13. What is a plantwide overhead rate? Why are multiple overhead rates, rather than a plantwide overhead rate, used in some companies?

14. What happens to overhead rates based on direct labor when automated equipment replaces direct labor?

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