ACC 604 Homework Chapter 4 (National University)
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<strong>ACC</strong> <strong>604</strong> <strong>Homework</strong> <strong>Chapter</strong> 4<br />
(<strong>National</strong> <strong>University</strong>)<br />
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<strong>604</strong>-homework-chapter-4-nationaluniversity/<br />
<strong>Chapter</strong> 4<br />
1. Why aren’t actual manufacturing overhead costs traced to jobs just as direct materials and direct<br />
labor costs are traced to jobs?<br />
2. What is the purpose of the job cost sheet in a job-order costing system?<br />
3. What is a predetermined overhead rate, and how is it computed?<br />
4. Explain how a sales order, a production order, a materials requisition form, and a labor time ticket<br />
are involved in producing and costing products.<br />
5. Explain why some production costs must be assigned to products through an allocation process.<br />
6. Why do companies use predetermined overhead rates rather than actual manufacturing overhead<br />
costs to apply overhead to jobs?<br />
7. What factors should be considered in selecting a base to be used in computing the predetermined<br />
overhead rate?<br />
8. If a company fully allocates all of its overhead costs to jobs, does this guarantee that a profit will be<br />
earned for the period?<br />
9. Would you expect the amount of overhead applied for a period to equal the actual overhead costs of<br />
the period? Why or why not?<br />
10. What is underapplied overhead? Overapplied overhead? What disposition is made of these<br />
amounts at the end of the period?<br />
11. Provide two reasons why overhead might be underapplied in a given year.<br />
12. What adjustment to cost of goods sold is made for underapplied overhead? What adjustment is<br />
made for overapplied overhead?<br />
13. What is a plantwide overhead rate? Why are multiple overhead rates, rather than a plantwide<br />
overhead rate, used in some companies?<br />
14. What happens to overhead rates based on direct labor when automated equipment replaces direct<br />
labor?