Reference no: EM132738784

Problem 1: Underapplied factory overhead related to a significant decrease in production should be charged to :

Group of answer choices

Option 1: Work in Process Inventory and Finished Goods Inventory

Option 2: Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold

Option 3: Finished Goods Inventory

Option 4: Cost of Goods Sold

Problem 2: An activity-based costing system that is designed for internal decision-making generally will not conform to generally accepted accounting principles. Which of the following is NOT a reason for this happening?

Group of answer choices

Option 1: Allocation bases other than direct labor-hours, direct labor cost, and machine-hours are used.

Option 2: Some nonmanufacturing costs are assigned to products.

Option 3: Some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products.

Option 4: First-stage allocations may be based on subjective interview data.