A single overhead rate for assigning all of the manufacturing production and service department costs to products. This rate is less accurate than departmental rates if a company manufactures a diverse group of...
A single overhead rate for assigning all of the manufacturing production and service department costs to products. This rate is less accurate than departmental rates if a company manufactures a diverse group of...
What is a plant-wide overhead rate? Author: Harold Averkamp, CPA, MBA Definition of Plant-wide Overhead Rate A plant-wide overhead rate is often a single rate per hour or a percentage of some cost that is used to...
What are departmental overhead rates? Author: Harold Averkamp, CPA, MBA Definition of Departmental Overhead Rates Departmental overhead rates are used by many manufacturers to allocate (assign, apply) manufacturing...
What are the advantages of departmentalizing manufacturing overhead costs? Author: Harold Averkamp, CPA, MBA The departmentalizing of manufacturing overhead costs allows for better planning and control if the head of...
Activity Based Costing Author: Harold Averkamp, CPA, MBA 19 Q&A Popular Recent What is cost accounting What is cost allocation? What is the traditional method used in cost accounting? What is a cost driver? What are...
What is a predetermined overhead rate? Author: Harold Averkamp, CPA, MBA Definition of Predetermined Overhead Rate A predetermined overhead rate is often an annual rate used to assign or allocate indirect manufacturing...
Cost and Managerial Accounting Author: Harold Averkamp, CPA, MBA 50 Q&A Popular Recent What is the cost of goods manufactured? What is contribution margin? What is prime cost? What is scrap value? What is the difference...
Manufacturing Overhead Author: Harold Averkamp, CPA, MBA 90 Q&A Popular Recent What is manufacturing overhead and what does it include? What is a flexible budget? What is absorption costing? What is the difference...
Our Explanation of Manufacturing Overhead gives you examples of what is included in manufacturing overhead. You will learn that these are indirect product costs and therefore are allocated to the products in order to...
Rates based on a department’s direct and indirect overhead costs and some measure of the department’s activity, such as the department’s machine hours. Departmental rates are more accurate than...
Usually an annual manufacturing overhead rate established just prior to an accounting year and based on budgeted amounts.
Manufacturing Overhead Quiz and Test | AccountingCoach Manufacturing Overhead(Practice Quiz) Download PDF Author: Harold Averkamp, CPA, MBA For multiple-choice and true/false questions, simply press or click on what you...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
What is a burden rate in inventory? Author: Harold Averkamp, CPA, MBA I assume that the burden rate in inventory refers to a manufacturer’s indirect manufacturing costs, which are also referred to as factory overhead,...
What is meant by overabsorbed? Author: Harold Averkamp, CPA, MBA Overabsorbed is usually used in the context of a manufacturer’s production overhead costs. Since manufacturing overhead costs are not directly traceable...
What is cost allocation? Author: Harold Averkamp, CPA, MBA Definition of Cost Allocation Cost allocation is the assigning of a cost to several cost objects such as products or departments. The cost allocation is needed...
What is the death spiral? Author: Harold Averkamp, CPA, MBA Definition of Death Spiral In cost accounting and managerial accounting, the term death spiral refers to the repeated elimination of a manufacturer’s products...
What do overabsorbed and underabsorbed mean? Author: Harold Averkamp, CPA, MBA Definition of Overabsorbed and Underabsorbed In cost accounting, overabsorbed and underabsorbed pertain to a manufacturer’s manufacturing...
What is the difference between actual overhead and applied overhead? Author: Harold Averkamp, CPA, MBA Definition of Actual Overhead In the context of actual and applied overhead, actual overhead refers to a...
Often referred to as fixed assets. This would include long term assets such as buildings and equipment used by a company. Plant assets (other than land) will be depreciated over their useful lives.
What is a plant asset? Author: Harold Averkamp, CPA, MBA What is a Plant Asset A plant asset is an asset with a useful life of more than one year that is used in producing revenues in a business’s operations. Plant...
A major classification on the balance sheet. It is the second long term asset section after current assets. Included are land, buildings, leasehold improvements, equipment, furniture, fixtures, delivery trucks,...
Standard Costing Quiz and Test | AccountingCoach Standard Costing(Practice Quiz) Download PDF Author: Harold Averkamp, CPA, MBA For multiple-choice and true/false questions, simply press or click on what you think is the...
Why use normal costing instead of actual costing? Author: Harold Averkamp, CPA, MBA Definition of Normal Costing For a manufacturer, normal costing means assigning the following costs to the actual goods produced each...
Can a cost be both a direct cost and an indirect cost? Author: Harold Averkamp, CPA, MBA A cost can be both a direct cost and an indirect cost. One of many examples is the cost of a supervisor in a department within a...
How do you determine the fixed portion of overhead cost? Author: Harold Averkamp, CPA, MBA I suggest that the first step in determining the fixed portion of a mixed cost (a cost that is partially fixed and partially...
Is there a relationship between direct materials variances and direct labor variances? Author: Harold Averkamp, CPA, MBA Definition of Direct Materials Variances Direct materials variances (pertaining to standard...
Our Explanation of Evaluating Business Investments compares four of the techniques for reviewing potential capital expenditures. You will be introduced to accounting rate of return, payback, net present value, and...
A variance arising in a standard costing system that indicates the difference between the standard amount of variable manufacturing overhead for the good units produced (standard hours times standard rate) and the...
What is the meaning of fixed overhead absorbed? Author: Harold Averkamp, CPA, MBA Definition of Fixed Overhead Absorbed Fixed overhead absorbed refers to a manufacturer’s fixed indirect manufacturing/production costs....
What is the difference between normal costing and standard costing? Author: Harold Averkamp, CPA, MBA Definition of Normal Costing Normal costing for manufactured products consists of following: Actual cost of materials...
Can absorption costing cause an increase in net income? Author: Harold Averkamp, CPA, MBA Definition of Absorption Costing Absorption costing is a cost accounting method (required by US GAAP) in which a manufacturer must...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
A percentage of an hourly wage rate (or salary) that represents the employer’s additional costs of employee benefits such as paid vacation days, paid sick days, insurance (health, dental, life, worker...
An indicator of profitability that is measured by dividing the accounting net income by the amount invested.
See direct labor rate variance.
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