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58 59 Question Completion Status: QUESTION S 4 points Save Answe Overapplied ove

ID: 2412807 • Letter: 5

Question

58 59 Question Completion Status: QUESTION S 4 points Save Answe Overapplied overhead occurs when the actual overhead costs incurred during a period are greater than the overhead costs applied during the period. O True O False QUESTION6 ABC Company uses a Materials Inventory account to record both direct and indirect materials. During the month of April, the company has the following cost information: Total materials purchased Total materials issued to production $100,000 20,000 110,000 50,000 Is issued is: The amount of direct ?$110,000 O $40,000 O $90,000 $20,000 ?$50,000 QUESTION 7

Explanation / Answer

Answer 5:

Correct answer is: False

Explanation:

When overheads applied are higher than actual overhead cost incurred during a period than it is termed as over-applied overheads.

This implies over-applied overhead occurs when actual overhead cost incurred during a period are lesser ( NOT GREATER) than the overhead cost applied during the period.

Answer 6:

Correct answer is: $90,000

Explanation:

Given:

ABC Company uses a Material Inventory account to record both direct and indirect materials.

Total material issued to production = $110,000

Indirect material issued to production = $20,000

Hence,

Direct material issued to production = Total material issued to production - Indirect material issued to production = $110,000 - $20,000 = $90,000

Other choices are incorrect.

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