1. True or false. The main driver of indirect costs for service firms is usually labor hours.
2. How do you calculate allocated manufacturing overhead to a certain job?
| a. By multiplying the total estimated manufacturing overhead by the total estimated allocation base to be used |
| b. | By multiplying the predetermined manufacturing overhead rate by the estimated allocation base to be used by the job |
| c. | By multiplying the estimated manufacturing overhead rate by the actual allocation base used by the job |
| d. | By multiplying the predetermined manufacturing overhead rate by the actual allocation base used by the job |
3. The predetermined indirect cost allocation rate is computed as
| a. total amount of the allocation base / total estimated indirect costs. |
| b. | total estimated indirect costs / total estimated amount of the allocation base. |
| c. | total estimated indirect costs + total estimated amount of the allocation base. |
| d. | total amount of the allocation base - total estimated indirect costs. |
4. True or false. The amount of overallocation or underallocation is found by taking the difference between the amount of overhead allocated during the year and the amount of overhead incurred during the year.
5. Allocating manufacturing overhead costs is done
| a. before the period starts. |
| d. | at the end of the period. |
6. Determining how much manufacturing overhead is overallocated or underallocated
| a. can be done at any time. |
| b. | is done at the end of the period. |
| c. | is done during the period. |
| d. | is done before the period starts. |
7. True or false. At a service company, the indirect costs of serving the client consists of operating expenses.
8. True or false. The amount of overallocation or underallocation is found by taking the difference between the amount of overhead allocated during the year and the amount of overhead estimated for the year.
9. How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?
| a. By multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base |
| b. | By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base |
| c. | By dividing the total estimated manufacturing overhead costs by the total actual amount of the allocation base |
| d. | By dividing the total estimated amount of the allocation base by the total estimated manufacturing overhead costs |
10. True or false. At a manufacturing company, inventory flows from work in process inventory, to raw materials inventory, to finished goods inventory.
