7) The amount of overallocation or underallocation is found by taking the difference between the amount of overhead allocated during the year and the amount of overhead incurred during the year.
8) The amount of overallocation or underallocation is typically corrected by adjusting the Work in Process Inventory account.
9) An overallocation of manufacturing overhead is typically corrected by increasing Cost of Goods Sold on the income statement.
10) An underallocation of manufacturing overhead is typically corrected by increasing Cost of Goods Sold on the income statement.
11) Underallocated manufacturing overhead results when:
A) production is greater than last year.
B) actual overhead is greater than expected.
C) estimated overhead is greater than actual overhead.
D) actual overhead is greater than allocated overhead.
12) Overallocated manufacturing overhead results when:
A) production is less than last year.
B) actual overhead is less than allocated overhead.
C) estimated overhead is less than actual overhead.
D) actual overhead is less than expected.
13) Adjusting of cost of goods sold for the underallocation or overallocation of manufacturing overhead is generally done:
A) before the period starts.
B) during the period.
C) at the end of the period.
D) at no time.
14) Determining how much manufacturing overhead is overallocated or underallocated is done:
A) before the period starts.
B) during the period.
C) at the end of the period.
D) at any time.
15) If manufacturing overhead has been overallocated during the period, then:
A) the jobs produced during the period have been undercosted.
B) the jobs produced during the period have been costed correctly.
C) the jobs produced during the period have been overcosted.
D) none of the above occur.
16) If manufacturing overhead has been underallocated during the period, then:
A) the jobs produced during the period have been undercosted.
B) the jobs produced during the period have been costed correctly.
C) the jobs produced during the period have been overcosted.
D) none of the above occur.