What Is (2) Underapplied Factory Overhead?
Sin Yi, Wong
Chapter 2 (17) Discussion questions. Please answer all of the questions.
a. Name two principal types of cost accounting systems.
Two types of cost accounting systems are process cost systems and job order cost system.
b. Which system provides for a separate record of each particular quantity of product that passes through the factory?
Job order systems provides for a separate record of each particular quantity of product that passes through the factory.
c. Which system accumulates the costs for each department or process within the factory?
Process cost systems accumulates the costs for each department or process within the factory.
------------------------------------------------------------
What kind of firm would use a job order …show more content…
What is (1) overapplied factory overhead and (2) underapplied factory overhead?
1.) Overapplied factory overhead means the applied exceeds the actual costs incurred, the factory overhead account will have a credit balance.
2.) Underapplied factory overhead means the amount applied is less than the actual costs incurred, the account will have a debit balance.
b. If the factory overhead account has a debit balance, was factory overhead underapplied or overapplied?
Underapplied.
c. If the factory overhead account has a credit balance at the end of the first month of the fiscal year, where will the amount of this balance be reported on the interim balance sheet? The amount of this balance will be recorded at the cost of goods sold account.
------------------------------------------------------------
At the end of the fiscal year, there was a relatively minor balance in the factory overhead account. What procedure can be used for disposing of the balance in the account?
One approach for disposing of the balance of factory overhead at the end of the year is to transfer the entire balance of the cost of goods sold account.
Chapter 2 (17) Discussion questions. Please answer all of the questions.
a. Name two principal types of cost accounting systems.
Two types of cost accounting systems are process cost systems and job order cost system.
b. Which system provides for a separate record of each particular quantity of product that passes through the factory?
Job order systems provides for a separate record of each particular quantity of product that passes through the factory.
c. Which system accumulates the costs for each department or process within the factory?
Process cost systems accumulates the costs for each department or process within the factory.
------------------------------------------------------------
What kind of firm would use a job order …show more content…
What is (1) overapplied factory overhead and (2) underapplied factory overhead?
1.) Overapplied factory overhead means the applied exceeds the actual costs incurred, the factory overhead account will have a credit balance.
2.) Underapplied factory overhead means the amount applied is less than the actual costs incurred, the account will have a debit balance.
b. If the factory overhead account has a debit balance, was factory overhead underapplied or overapplied?
Underapplied.
c. If the factory overhead account has a credit balance at the end of the first month of the fiscal year, where will the amount of this balance be reported on the interim balance sheet? The amount of this balance will be recorded at the cost of goods sold account.
------------------------------------------------------------
At the end of the fiscal year, there was a relatively minor balance in the factory overhead account. What procedure can be used for disposing of the balance in the account?
One approach for disposing of the balance of factory overhead at the end of the year is to transfer the entire balance of the cost of goods sold account.