In Order to Adjust for the Over/under-Applied Manufacturing Overhead, Abe

question 99

Multiple Choice

In order to adjust for the over/under-applied manufacturing overhead, Abe Company increased its balance in the Cost of Goods Sold account only.This implies that:

• A)The company incurred more overhead costs than the overhead assigned to jobs, and the amount was not material.
• B)The company incurred less overhead costs than the overhead assigned to jobs, and the amount was material.
• C)The company incurred more overhead costs than the overhead assigned to the jobs, and the amount was material.
• D)The company incurred less overhead costs than the overhead assigned to jobs, and the amount was not material.

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Definitions:

Additional Investments

Funds injected into a business by its owners or shareholders to provide additional capital for operations or expansion.

Purchases Of Merchandise

Transactions involving the acquisition of goods for resale in the ordinary course of business, typically in a retail or wholesale setting.

Future Economic Benefit

The potential to contribute directly or indirectly to the flow of cash and cash equivalents to an entity.

Common Characteristic

A property or attribute that is shared among all members of a category.