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2 years ago

The manufacturing overhead account is debited when ______.

1 answer:

5 0

Production process involves different type of cost and expenses, manufacturing overhead account is one and it is debited when overhead applied is less than the actual overhead costs incurred.

<h3>What is manufacturing overhead cost?</h3>

It is the sum of all the indirect costs that were spent while manufacturing a product.

The amount in the manufacturing overhead account can either be a debit or credit.

It is a debit when the overhead is less than the actual overhead costs that were spent.

Therefore, The manufacturing overhead account is debited when the overhead applied is less than the actual overhead costs incurred.

Learn more manufacturing overhead accounts here

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3 years ago

Parton Company, a manufacturer of snowmobiles, is operating at 80% of plant capacity. Parton's plant manager is considering maki

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Answer:

The answer is: a

Explanation:

The Parton Company has a 'make or buy' decision. This decision involves analysing the incremental costs associated with each option. Incremental costs are costs incurred as a result of producing one more unit of a product. If the excess capacity can be utilised to produce the headlights at a lower cost than the cost of acquiring the headlights from an external supplier, then the company should produce the headlights.

The Parton Company incurs $12.80 per headlight purchased from the external supplier. Added to this cost, are the existing costs of operating below plant capacity. If making the headlights in the manufacturing plant yields a positive contribution to fixed costs, then the Parton company should produce the headlights in the manufacturing plant.

By producing the headlights, the Parton company gains a contribution to fixed costs of $1.03 per headlight.

Foregone purchase costs from supplier: $12.80

Incurred costs (directly) from production: ($11.77)

Direct materials ($4.45)

Direct Labour ($3.45)

Manufacturing Overheads: $(6.45*0.6) ($3.87)

Net gain per headlight $1.03

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3 years ago

In 2018, Southwestern Corporation completed the treasury stock transactions listed below February 2: Reacquired 70,000 shares at

Tcecarenko [31]

Answer:

2nd February Treasury Stock Dr 840,000

Cash Cr 840,000

(Cash paid $12*70000 = 840,000)

17 March Cash Dr 280,000

Treasury Stock Cr 240,000

Additional Paid-In Capital Cr 40,000

-Cash 20000×$14 = 280,000.

-Treasury stock 20000×$12=240,000)

17 May Cash Dr 200,000

Disc on Capital Dr 100,000

Treasury stock Cr 300,000

Cash 25000×$8=200,000.

Tresury stock 25000×$12= 300,000

Explanation:

For the cost method, the purchase of treasury stock is noted by debiting treasury stock account by the actual cost of purchase. Par value of the shares as well as the amount received from investors when the shares were firstly issued is ignored in the cost method.

Reissuance of treasury share results in credited treasury stock account for the cost at which they were purchased, cash account debited for the amount actually received &at times, the amount received on reissuance of treasury stock is greater than the cost of treasury stock, the difference between the amount received and cost of the treasury stock is credited to additional paid-in capital. It is lower than the cost of treasury stock, when the excess of cost of treasury stock over the amount received is debited to discount on capital account.

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3 years ago

Karl opens a savings account with $2500. He deposits $1500 every year into the account that has a 0.75% interest rate, compounde

zhuklara [117]

Answer:

Total FV= $29,335.25

Explanation:

First, we need to calculate the future value of the initial investment ($2,500) using the following formula:

FV= PV*(1 + i)^n

PV= $2,500

i= 0.0075

n=10*12= 120 months

FV= 2,500*(1.0075^120)

FV= $6,128.39

Now, the future value of the $1,500 annual deposit:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

We need to determine the effective annual rate:

Effective annual rate= (1.0075^12) - 1= 0.0938

FV= {1,500*[(1.0938^10) - 1]} / 0.0938

FV= $23,206.86

Total FV= $29,335.25

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3 years ago

A notice is published stating that RMO 5% convertible preferred stock will be called at $60 per share. The preferred is converti

dybincka [34]

Answer: d. A price near $60

Explanation:

The Preferred Stock was selling at $56 then a notice was circulated that RMO would be calling the stock at a price of $60.

This $60 is more than the current $56 and so this will need to reflect in the price of the stock. The adjustment will cause the Preferred stock to start trading near $60 as traders will seek to take advantage of the impending call by buying at a lower price and thus making a bit of profit when the stock is called at $60. The market will adjust to this because the Preferred stock will be perceived as undervalued. A price closer to the Call price will therefore become the new price to properly value the stock.

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3 years ago