6.

A debit balance in manufacturing overhead control account is

a.Overapplied overhead
b.Underapplied overhead
c.Idle capacity variance
d.Spending variance
Answer: B

7. Overapplied manufacturing overhead would result if :

a.Manufacturing cot incurred is less than cost charged to production
b.Manufacturing overhead cost incurred were unreasonably large in relation to units
produced
c.Manufacturing overhead cost incurred were greater than cost charged to production
d.The plant were operating at less than normal capacity
Answer: A

8. EG Company found that the differences in product costs resulting from the
application of predetermined overhead costs rate rather than actual overhead rates
were very significant when actual production was substantially less than planned
production. The most likely explanation is that:
a.Cost of overhead were substantially less than anticipated
b.Overhead was composed chiefly of variable costs
c.Several products were produced simultaneously
d.Fixed manufacturing overhead was a significant cost
Answer: A

9. When the amount of overapplied manufacturing overhead is significant, the entry

close overapplied manufacturing overhead will most likely require:
a.A debit to Cost of goods sold
b.Debit to cost of goods sold, finished goods inventories, and work in process
inventory
c.A credit to cost of goods sold
d.Credit to cost of goods sold, finished goods inventory, and work in process
inventory
Answer: D

10.Costing system that charge the product with the use of an arbitrary overhead
application rate determined at the end of the period.
a.Normal costing
b.Actual costing
c.Job order costing
d.Process costing
Answer: A