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 82 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


jamesnevil303

  • Member
  • Posts: 337
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

Did you know?

One way to reduce acid reflux is to lose two or three pounds. Most people lose weight in the belly area first when they increase exercise, meaning that heartburn can be reduced quickly by this method.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

For a complete list of videos, visit our video library