What Method Is Not Acceptable for Closing the Balance in the Manufacturing

question 42

Short Answer

What method is not acceptable for closing the balance in the manufacturing overhead control accounts? a. Post any over or underapplied overhead directly to cost of goods sold
B) Correct the rates for the entire year, once actual overhead costs are known
C) Prorate the under or overapplied overhead amount between the inventory accounts
D) Show overapplied costs as revenue and underapplied costs as an expense directly on the income statement

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Definitions:

Profit Maximization

The strategic method companies use to ascertain production levels and pricing that achieve maximum profitability.

Utility Function

A mathematical representation of how certain amounts of goods or services generate levels of satisfaction or utility for an individual or an entity.

Coconut Consumption

The act of using coconuts, either by eating or in the production of products such as oil, within an economic system.

Competitive Market

A market structure characterized by a large number of buyers and sellers, so no single participant has significant market power.