This topic contains a solution. Click here to go to the answer

Author Question: Which method of allocation probably best estimates actual overhead costs used? Why? Gregory ... (Read 81 times)

Lobcity

  • Hero Member
  • *****
  • Posts: 524
Which method of allocation probably best estimates actual overhead costs used? Why?
 
  Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
 
  Cost Pool Overhead Costs Cost driver Activity level
  Supervision of direct labor 320,000 Direct labor-hours 800,000
  Machine maintenance 120,000 Machine-hours 960,000
  Facility rent 200,000 Square feet of area 100,000
   Total overhead costs 640,000
 
  The accounting records show the Mossman Job consumed the following resources:
 
   Cost driver Actual level
   Direct labor-hours 200
   Machine-hours 1,600
   Square feet of area 50
 
  A) Single direct labor-hours cost driver because it is best to allocate total costs uniformly to individual jobs.
  B) Single direct labor-hours cost driver because it is easiest to analyze and interpret.
  C) Three activity-cost drivers because they best reflect the relative consumption of resources.
  D) Three activity-cost drivers because product costs can be significantly cross-subsidized.

Question 2

Financial statements commonly prepared by businesses include an income statement, a statement of owner's equity, and a balance sheet.
 a. True
   b. False
   Indicate whether the statement is true or false



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

lolol

  • Sr. Member
  • ****
  • Posts: 330
Answer to Question 1

Answer: C

Answer to Question 2

True




Lobcity

  • Member
  • Posts: 524
Reply 2 on: Jul 5, 2018
Thanks for the timely response, appreciate it


debra928

  • Member
  • Posts: 342
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Bacteria have flourished on the earth for over three billion years. They were the first life forms on the planet.

Did you know?

Egg cells are about the size of a grain of sand. They are formed inside of a female's ovaries before she is even born.

Did you know?

The average older adult in the United States takes five prescription drugs per day. Half of these drugs contain a sedative. Alcohol should therefore be avoided by most senior citizens because of the dangerous interactions between alcohol and sedatives.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

For a complete list of videos, visit our video library