Is it possible for costs such as salaries or depreciation to end up as assets on the balance sheet? Explain using examples to support your statements.
a. XYZ Company has high fixed expenses and is presently operating somewhat above the break-even point. From this point on, will percentage increases in net income tend to be greater than, about equal to, or less than percentage increase in total sales? Why? Explain. Estimated or budgeted cost and operating data for three companies for 2015 are given below: Calculate the predetermined overhead rate to be used in each company during 2015.
b. Assume that three jobs are worked on during 2015 in company X. Machine-hours recorded by jobs are: job 23, 21,000 hours; job 29, 16,000 hours; and job 31, 11,000 hours. How much overhead will the company apply to work in process? If actual overhead costs total $149,000 for 2015, will overhead be over- or under-applied? By how much?