Reference no: EM131295045
1. The estimates used to calculate the predetermined overhead rate will virtually always:
prove to be correct.
result in a year-end balance of zero in the Manufacturing Overhead account.
result in overapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount.
result in underapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount.
result in either underapplied or overapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount.
2. If the amount of effort and attention to products varies substantially throughout a company's various manufacturing operations, the company might consider the use of:
a plant wide overhead rate.
departmental overhead rates.
actual overhead rates instead of predetermined overhead rates.
direct labor hours to determine the overhead rate.
machine hours to determine the overhead rate.
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