ACCT230 Homework - Week 3, Chapter 4 Problem 1: Indicate your answer in the Answers column by writing a "T" for True or an "F" for False. Answers 1. Factory overhead includes indirect materials, indirect labor, and all other indirect manufacturing expenses..... T 2. Examples of fixed factory overhead costs include property taxes and insurance on factory equipment. P3 1.84 T 3. Examples of Type B semivariable factory overhead costs, which are referred to as step-fixed or step-variable costs, include inspection and handling, and factory supervision... A.189...Tupai. A. F 4. Total product costs should include a share of service department costs as well as the costs of production departments.. 5. Predetermined factory overhead rates are not very popular in practice because it is not important to know the cost of a job or process until the end of the period. 6. A flexible budget shows the expected factory overhead at any level of production... 7. A debit balance in Factory Overhead, after Applied Factory Overhead has been closed to it, indicates that more overhead was applied than actually was incurred.. 8. When the year-end balance in Under- and Overapplied Factory Overhead is large, it should be closed to Materials, Finished Goods, and cost of Goods Sold so as not to distort net income for the period.. 9. The entry to close Applied Factory Overhead to Factory Overhead is a credit to Factory Overhead and a debit to Applied Factory Overhead.. 10. The activity based costing method can be used by service businesses as well as manufacturing businesses