At the beginning of the year, Barcroft Co. estimated that its total annual fixed overhead costs would amount to $25,000. Further, Barcroft estimated that its volume of production would be 2,000 units of product. Based on these estimates, Barcroft computed a predetermined overhead rate that was used to allocate overhead costs to the products made during the year. As predicted, actual fixed overhead costs did amount to $25,000. However, actual volume of production amounted to 2,200 units of product. Based on this information alone:
A. Products were overcosted during the year.
B. Products were costed accurately during the year.
C. Products were undercosted during the year.
D. The answer cannot be determined from the information provided.
Answer: A
You might also like to view...
According to the model of buyer behavior, which of the following is one of the two primary parts of a "buyer's black box"?
A) technological stimuli B) buyer's decision process C) buyer's spending habits D) social stimuli E) promotion stimuli
The perpetual system requires that each sale of merchandise has two entries: the revenue side and the cost side.
Answer the following statement true (T) or false (F)
ETutor is an online tutoring service provider that is particularly popular with college students. The company is interested in estimating the fixed and variable components of its tutoring services costs. The manager believes that these costs are driven by the number of hours of tutoring services provided. The following information was gathered for the last six months of business:MonthNumber of Hours Tutoring costsJanuary 25,000 $308,000 February 41,000 420,000 March 29,000 352,000 April 31,000 373,000 May 34,000 378,000 June 18,000 252,000 Required: 1) Compute the average tutoring cost per hour for the six-month period. (Round the average tutoring cost per hour to two decimal points.)2) Use the high-low method to estimate the total fixed cost
and the variable cost per hour. (Round the variable cost per hour to two decimal points.)3) Name one advantage and one disadvantage of the high-low method. 4) Describe the scattergraph method that can be used to analyze mixed costs. What will be an ideal response?
Long-term relationships create ethical and legal obligations between the parties through conduct and accommodations
Indicate whether the statement is true or false