Filippucci Company Used a Budgeted Indirect-Cost Rate for Its Manufacturing

question 137

Multiple Choice

Filippucci Company used a budgeted indirect-cost rate for its manufacturing operations, the amount allocated ($200,000) is different from the actual amount incurred ($225,000) .

-Which account is credited to write off the difference between allocated and actual overhead using the proration approach?

• A) Work-in Process Control
• B) Manufacturing Overhead Allocated
• C) Finished Goods Control
• D) Manufacturing Overhead Control

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Definitions:

Average Product

The amount of output produced on average by each unit of a variable input, such as labor, in the production process.

Marginal Product

is the additional output resulting from a one-unit increase in the quantity of one input while holding other inputs constant, illustrating the concept of diminishing returns.

Last Dollar Spent

The concept of allocating resources until the marginal utility of expenditure on each good or service is equal, maximizing utility.

Labor Productivity

A measure of the amount of goods and services produced by one hour of labor.