Question: If direct labor - hours is used as the allocation base in a job - order costing system, but overhead costs are not caused by

If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be undercosted relative to jobs with low direct labor requirements.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

Mela Company Mela Company uses a job order costing approach. Direct labor hours are used as the allocation base for overhead costs. At the beginning of the year, it was estimated that the company...

Q:

Mela Company Mela Company sses a job order costing approach. Direct labor hours are used as the allocation base for overhead costs. At the beginning of the year, it was estimated that the company...

Q:

Specialized Surgical Instruments (SSI) manufactures four surgical implants. SSI uses an absorption costing system to allocate manufacturing overhead to its four products. Direct labor hours are used...

Q:

Please answer all of the following questioms posted (1,2 a b & c). V. Mascot City makes athletic mascot costumes. Manchester University had ordered a new costume for Manny. 1. List at least 5 items...

Q:

Medusa Products uses a job order costing system Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would incur...

Q:

A. The company sells each package of protein powder for $35. Actual sales for November were 20,000 units and for December were 15,000 units. Budgeted sales in units for the next five months are as...

Q:

April 30 May 31 Inventories Raw materials $26,000 5 43,000 Work in process 9,600 19,300 Finished goods 69,000 33,000 Activities and information for May Raw materials purchases (paid with cash)...

Q:

Harwood Company is a manufacturing firm that operates a job order costing system. Overhead costs are applied to jobs on the basis of machine hours. At the beginning of the year, management estimated...

Q:

Harwood Company is a manufacturing firm that operates a job order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated...

Q:

1. The use of a predetermined overhead rate in a job-order cost system makes it possible to compute the total cost of a job before production is begun. TRUE/FALSE 2. If direct labor-hours is used as...

Q:

Giving a test to a group of students, the grades and genders are summarized below. A B 16 8 Male 13 Female 12 19 14 Total 25 35 22 Total 37 45 82 If one student is chosen at random, find the...

Q:

List some reasons why an employee might embezzle cash from his employer and the evidence that would determine which reason (or reasons) could provide the pressure to motivate a person to embezzle....

Q:

An armed robber pulled a gun on a teller at the Fourth National Bank. He made off with over $ 1 0 , 0 0 0 in cash. Which insuring agreement in a financial institution bond is designed to cover such...

Q:

Determine the major differences between U.S. GAAP and IFRS disclosure reporting requirements related to each separately reportable operating segment. Next, give your opinion as to whether either U.S....