A manufacturing company uses direct labour cost as a basis for determining its predetermined overhead recovery rate. In
calculating the predetermined overhead recovery rate for the past year, the company misclassified a portion of direct labour
cost as indirect labour cost. This misclassification will …
a. It is impossible to tell if there will be any effect, based on the information provided.
b. have no effect on the predetermined overhead recovery rate
c. overstate the predetermined overhead recovery rate.
d. understate the predetermined overhead recovery rate.
Clear my choice
Question 2
Answer saved
Marked out of 1.00
Over-application (over-recovery) of production overheads means that the …
a. budgeted overhead cost was less than the actual overhead cost.
b. applied overhead cost was less than the actual overhead cost.
c. budgeted overhead cost was less than the applied overhead cost.
d. applied overhead cost was greater than the actual overhead cost.
Assuming that all variables remain constant, an increase in variable cost per unit will ...
a. Increase contribution
b. Decrease fixed cost
c. Decrease profit
d.
Change nothing
Clear my choice
Question 9
Answer saved
Marked out of 1.00
A perpetual inventory system is a system for ...
a. ensuring that inventory-taking procedures will satisfy the auditors.
b. recording all transactions in the storage department on a continuous basis.
c. checking inventory on the same date in each accounting period.
d. checking physical inventory against bin card information on a continuous basis.
Clear my choice
Question 10
Answer saved
Marked out of 1.00
Smell-Good (Pty) Ltd manufactured and sold 1 000 units of body perfumes. The company incurred fixed costs of R50 000
and made a profit of R30 000 from sales. What is the contribution per unit?
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller passmatetutorials. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.84. You're not tied to anything after your purchase.