Which of the Following Is Correct with Respect to Closing

question 146

Multiple Choice

Which of the following is correct with respect to closing out overapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold?

• A) The balance in the Work-in-Process account after allocation will be higher if the overapplied overhead is closed out by allocating it to all appropriate accounts.
• B) The balance in the Work-in-Process account after allocation will be the same under either method.
• C) Operating income will be higher if all of the overapplied overhead is closed out to Cost of Goods Sold.
• D) Cost of Goods Sold will be lower if the overapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold.

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Definitions:

Allostatic Load

The physiological wear and tear on the body that results from ongoing adaptive efforts to maintain stability (homeostasis) in response to stressors.

Present Experience

The immediate perception of events happening at the current moment, involving a focus on the here and now.

Mindfulness

Paying attention on purpose in the present moment with attitudes of curiosity, patience, nonjudgement and openness.

Negative Affectivity

The state or trait tendency to experience nervousness, fear, anger, sadness, contempt, or guilt.