In a Job-Order System, Recording the Use of Indirect Materials

question 13

Multiple Choice

In a job-order system, recording the use of indirect materials would include a debit to

• A)Overhead Control.
• B)Work in Progress.
• C)Finished Goods.
• D)Raw Materials.

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Definitions:

Predetermined Factory Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a standard cost system.

Estimated Total Factory Overhead Costs

The projected total of all indirect expenses related to the production process, including indirect labor, materials, and other overhead costs.

Estimated Activity Base

A projected measure of activity, such as labor hours or machine hours, used for allocating overhead costs in budgeting and costing.

Predetermined Overhead Rate

A rate calculated at the beginning of a period, used to allocate estimated overhead costs to products or services.