Overheads Flashcards
1
Q
Overheads
A
Indirect cost which can be difficult to trace the cost to a particular product
Fixed or Variable
2
Q
Predetermined OH rate
A
Estimated MOH / Estimated activity
3
Q
Allocated OH rate
A
Predetermined OH rate x Actual activity
4
Q
Under-allocated OH
A
Actual OH > Allocated OH, which results in a loss & reduction in profit
5
Q
Over-allocated OH
A
Actual OH < Allocated OH, which results in a profit & increase in profit
6
Q
Journal Entry
Actaul costs incurred
A
Dt OH Control
Ct Creditors/Bank
7
Q
Journal Entry
Overhead allocated
A
Dt WIP Control
Ct MOH Control
8
Q
Budget variance
A
Budgeted Overhead - Actual Overead
9
Q
Volume Variance
A
(Actual activity - Budgeted activity) x Predetermined OH rate
