Chapter 5 And 7

Question 1

The predetermined overhead rate units is

Answer 1

$ per allocated unit

Question 2

Overhead costs

Answer 2

Just allocated units x inputs not material or labor

Question 3

Calculate margin

Answer 3

Sales
Less DM and DL
Less OH
=
Customer Margin

Question 4

What to check after calculating the predetermined overhead rate

Answer 4

How much of the allocation base is used per unit?

Question 5

MOH vs OH

Answer 5

OH includes dm and dl

Question 6

Stuff

Answer 6

If too little is allocated, the markup price won’t behind up to turn a profit. If too much overhead, this allocated, then will be too expensive and customers will move to competitors.