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

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 72
Topic #: 1

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:

ADebit: production overhead control account $158,000
Credit: work in progress control account $158,000

BDebit: production overhead control account $153,000
Credit: work in progress control account $153,000

CDebit: work in progress control account $158,000
Credit: production overhead control account $158,000

DDebit: work in progress control account $153,000
Credit: production overhead control account $153,000

Show Suggested Answer

Suggested Answer: C

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

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Niesha

1 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

1 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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2 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

26 days 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

1 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

1 months ago

Option A is correct. The actual production overhead of $158,000 should be recorded in the books.

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Jacqueline

2 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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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

1 months ago

Yes, the total absorption should be $153,000 with 25,500 machine hours worked.

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Aleshia

2 months ago

I agree, option D is the correct answer.

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Kanisha

2 months ago

I disagree, I believe the answer is B.

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Jacqueline

2 months ago

I think the answer is A.

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

Contribute your Thoughts:

Niesha

Sylvia

Lucia

Glory

Katina

Linn

Eladia

Sena

Justine

Celeste

Tamesha

Jacqueline

Pauline

Jerrod

Aleshia

Kanisha

Jacqueline