In a Normal Cost System,a Debit to Work in Process

question 10

Multiple Choice

In a normal cost system,a debit to Work in Process Inventory would not be made for

• A)actual overhead.
• B)applied overhead.
• C)actual direct material.
• D)actual direct labor.

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are expensed in the period they are incurred, such as selling, general, and administrative expenses.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost

A cost that varies with the level of output or sales, such as materials and labor directly involved in production.

Measure Of Activity

A quantifiable metric used to assess the level of operation or output, often tied to performance or productivity evaluation.