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CIMAPRA17-BA2-1 Exam - Topic 1 Question 72 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam
Question #: 72
Topic #: 1
[All CIMAPRA17-BA2-1 Questions]

A company uses an integrated accounting system and absorbs production overhead using a predetermined rate of $6 per machine hour.

Last period a total of 25,500 machine hours were worked and the actual production overhead incurred was $158,000.

The accounting entries for the absorption of production overhead for the period would be:

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Suggested Answer: C

by Elfriede at May 29, 2024, 03:59 AM

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Domitila
4 months ago
Not sure about this, seems like a mistake in the numbers.
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Sophia
5 months ago
Definitely not option C, that's backwards!
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Fairy
5 months ago
Wait, how did they incur $158,000 with 25,500 hours?
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Rodolfo
5 months ago
I think it should be option A, that makes the most sense.
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Aileen
5 months ago
The predetermined rate is $6 per machine hour.
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Precious
6 months ago
I vaguely remember that the total overhead absorbed should match the actual incurred, so maybe it's option A? But I’m not completely confident.
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Cammy
6 months ago
I feel like the predetermined rate of $6 per machine hour should guide us, but I'm confused about how that ties into the actual overhead incurred.
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Meaghan
6 months ago
I think we did a similar practice question where we had to debit and credit the accounts, but I can't recall if it was the production overhead or work in progress that got debited.
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Iluminada
6 months ago
I remember we discussed how to calculate the absorbed overhead based on machine hours, but I'm not sure if it's $158,000 or something else.
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Antonio
6 months ago
I've got this! The key is to recognize that the actual overhead incurred was $158,000, but the absorbed overhead based on the predetermined rate was only $153,000. So the accounting entries would be a debit to the production overhead control account for $158,000 and a credit to the work in progress control account for $158,000.
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Anisha
6 months ago
Okay, let me think this through step-by-step. The predetermined overhead rate is $6 per machine hour, and 25,500 machine hours were worked. So the absorbed overhead would be 25,500 * $6 = $153,000. Then I need to compare that to the actual overhead of $158,000 and determine the correct accounting entries.
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Diane
6 months ago
Hmm, I'm a bit confused. Do I need to calculate the absorbed overhead or just determine the correct accounting entries? I want to make sure I understand the question fully before attempting to answer.
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Barrett
6 months ago
This looks straightforward. I just need to calculate the absorbed overhead based on the predetermined rate and the actual machine hours, then compare that to the actual overhead incurred.
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Clorinda
6 months ago
Hmm, I'm not sure about this one. I'll need to think it through step-by-step to make sure I understand the best way to solve this.
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Wilford
7 months ago
I'd eliminate A and B quickly - those don't sound like something a regulatory body would mandate. Narrowing down to C or D.
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Niesha
11 months ago
Option D all the way! Gotta love those predetermined overhead rates, they make the accounting so much simpler. Now, where's the snack bar in this place?
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Sylvia
11 months ago
Hold up, is this a trick question? I feel like I'm missing something here. Better read it over one more time to make sure I don't mess this up.
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Lucia
11 months ago
Haha, looks like someone forgot to double-check the math! That's why I always have a calculator on hand for these exams.
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Joanna
10 months ago
C) Debit: work in progress control account $158,000 Credit: production overhead control account $158,000
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Irma
10 months ago
B) Debit: production overhead control account $153,000 Credit: work in progress control account $153,000
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Glory
10 months ago
C) Debit: work in progress control account $158,000 Credit: production overhead control account $158,000
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Katina
10 months ago
B) Debit: production overhead control account $153,000 Credit: work in progress control account $153,000
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Linn
10 months ago
A) Debit: production overhead control account $158,000 Credit: work in progress control account $158,000
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Eladia
11 months ago
A) Debit: production overhead control account $158,000 Credit: work in progress control account $158,000
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Sena
11 months ago
I'm a bit confused. Shouldn't the actual production overhead of $158,000 be the amount recorded in the books? Option A seems more logical to me.
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Justine
11 months ago
It's important to accurately record the production overhead to ensure the financial statements reflect the true costs of production.
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Celeste
11 months ago
Yes, that's right. Debit the production overhead control account and credit the work in progress control account.
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Tamesha
11 months ago
Option A is correct. The actual production overhead of $158,000 should be recorded in the books.
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Jacqueline
12 months ago
But the actual production overhead incurred was $158,000, so it should be debited to production overhead control account.
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Pauline
12 months ago
Option D seems to be the correct answer. The predetermined rate is $6 per machine hour, and with 25,500 machine hours worked, the total absorption should be $153,000, which matches the entry in option D.
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Jerrod
11 months ago
Yes, the total absorption should be $153,000 with 25,500 machine hours worked.
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Aleshia
11 months ago
I agree, option D is the correct answer.
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Kanisha
12 months ago
I disagree, I believe the answer is B.
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Jacqueline
1 year ago
I think the answer is A.
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