Match each item with the correct statement below.
-Estimated overhead for a single department divided by the estimated activity level for that same department
A)predetermined overhead rate
B)plantwide overhead rate
C)departmental overhead rate
D)overhead variance
E)overapplied overhead
F)underapplied overhead
G)applied overhead
H)normal cost of goods sold

Question

Quizplus · Accepted Answer

The departmental overhead rate is calculated by dividing the estimated overhead for a single department by the estimated activity level for that department.

Answer: A
 The predetermined overhead rate is an estimate of the overhead costs that will be incurred by a specific department or plant and is calculated by dividing the estimated total manufacturing overhead costs by the estimated total amount of the allocation base.

Answer: B
 The plantwide overhead rate is calculated by dividing the estimated total manufacturing overhead costs by the estimated total amount of the allocation base for the entire plant.

Answer: D
 Overhead variance refers to the difference between the actual overhead costs incurred and the estimated overhead costs.

Answer: E
 Overapplied overhead occurs when estimated overhead costs exceed actual overhead costs.

Answer: F
 Underapplied overhead occurs when actual overhead costs exceed estimated overhead costs.

Answer: G
 Applied overhead refers to the amount of overhead costs that are allocated to a specific product or job based on the predetermined overhead rate.

Answer: H
 The normal cost of goods sold refers to the cost of goods sold using the predetermined overhead rate and the actual amount of the allocation base.

Match Each Item with the Correct Statement Below