When Overhead Is Debited to Overhead Control, What Is the Credit

question 129

Multiple Choice

When overhead is debited to Overhead Control, what is the credit?

• A) Various payable accounts
• B) Cost of Goods Sold
• C) Work in Process
• D) Finished Goods
• E) Accounts Receivable

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Definitions:

Sunk Cost

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Indirect Cost

Expenses not directly tied to the production of goods or services, such as administration, rent, and utilities.

Manufacturing Overhead

This encompasses all the indirect costs associated with the manufacturing process, including utilities, depreciation, and salaries for non-direct labor.