Question

1. Hutton Company reported a $750 unfavorable overhead variance on a recent performance report. This means that factory overhead was underapplied during the period.

True or False

2. Companies need service and product cost information for both financial reporting and managerial accounting.

True or False

3. Actual overhead costs are debited to the manufacturing overhead account, while estimated overhead costs are debited to the work in process account.

True or False

4. The predetermined overhead rate is found by dividing the total estimated overhead costs by the total estimated volume of the overhead allocation base.

True or False

5. The absorption costing approach uses the contribution margin income statement format.

True or False

Answer 1

NO.	CASE	TRUE / FALSE	REMARKS
1)	Hutton Company reported a $750 unfavorable overhead variance on a recent performance report. This means that factory overhead was underapplied during the period.	TRUE	The given statement is True .Company reported unfavourable overhead variances of $750since not all that is spent is applied to production
2)	Companies need service and product cost information for both financial reporting and managerial accounting.	TRUE	IT is true that the company need both financial reporting and managerial accounting.as because both finanacial and managerial need cost information about the company's product and various services.In financial reporting cost information is needed to estimate the inventory on the balance sheet and Cost of goods sold on Income statement.In managerial accounting it is needed for Determining Cost and Sales
3)	Actual overhead costs are debited to the manufacturing overhead account, while estimated overhead costs are debited to the work in process account.	Flase	The given statemnent is false as Actual overhead costs are debited to the manufacturing overhead account, while estimated overhead costs are credited to the work in process account.
4)	The predetermined overhead rate is found by dividing the total estimated overhead costs by the total estimated volume of the overhead allocation base.	TRUE	The given statement is true .Predetermined Overhead = Total estimated overhead costs/ total estimated volume of the overhead allocation base.
5)	The absorption costing approach uses the contribution margin income statement format.	FALSE	The given statement is False as it is Variable costing which uses Contribution Margin income statement format.Variable costing is often used for internal decision making and it is the costing method used for the contribution format income statement

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