At the end of April, the manufacturing overhead clearing account for Owens Company had a debit balance of $9,100, which they have deemed not to be material. How would managers best interpret this outcome and how should they address it?

A.

The company underapplied manufacturing overhead and should credit their cost of goods sold account for the given amount.

B.

The company overapplied manufacturing overhead and should debit their cost of goods sold account for the given amount.

C.

The company underapplied manufacturing overhead and should debit their cost of goods sold account for the given amount.

D.

The company overapplied manufacturing overhead and should credit their cost of goods sold account for the given amount.

E.

The amount it too high and the company should distribute the $9,100 across cost of goods sold, finished goods, and work-in-process accounts to clear the manufacturing overhead.

Brunello Inc. is a zinc plating company and is attempting to calculate their total manufacturing costs for the previous year. By the end of the year, Brunello had applied MOH of $145,000 and actual MOH of $150,000. If Direct Materials costs were $170,000 and Direct Labour costs were $85,000, what would the total manufacturing costs for the year be on December 31st?

A.

$295,000.

B.

$400,000.

C.

$550,000.

D.

$395,000.

E.

Cannot be calculated without Work-in-process inventory values.

Which of the following is NOT a cause of differences between actual and applied manufacturing overhead?

A.

The use of a predetermined overhead rate treats overhead costs as if they are variable costs, when in reality most are fixed costs.

B.

The allocation base used to apply overhead is not representative of the factors that drive different overhead cost items.

C.

The estimated and actual overhead prices of the individual overhead items are different.

D.

The cost of raw materials used in production increased in price over the course of the accounting period.

E.

All of the above are causes of differences between actual and applied manufacturing overhead.