1. FreeWater Company provided the following information from its accounting records for 2014:
Expected production 50,000 labor hours
Actual production 45,000 labor hours
Budgeted overhead $1,257,500
Actual overhead $1,449,900
2. How much is the overhead application rate if Freewater Company bases it on direct labor hours?
$27.94 per hour
$25.15 per hour
$29.00 per hour
$32.22 per hour
3. Companies assign manufacturing overhead to work in process on an applied basis through the use of a(n)
estimated overhead rate.
actual overhead rate.
assigned overhead rate.
predetermined overhead rate.
4. If manufacturing overhead has been overapplied during the year, the adjusting entry at the end of the year will show a
credit to Finished Goods Inventory
debit to Manufacturing Overhead.
credit to Work in Process Inventory.
debit to Cost of Goods Sold.
5. If the Manufacturing Overhead account has a debit balance at the end of a period, it means that
actual overhead costs were greater than overhead costs applied to jobs.
actual overhead costs were less than overhead costs applied to jobs.
no jobs have been completed.
actual overhead costs were equal to overhead costs applied to jobs.