The Recording of the Application of Factory Overhead Costs to Jobs

question 33

Multiple Choice

The recording of the application of factory overhead costs to jobs would include a credit to

• A) Factory Overhead
• B) Wages Payable
• C) Work in Process
• D) Cost of Goods Sold

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Definitions:

Variable Overhead

Costs that vary with the level of production output, such as utilities for manufacturing equipment, which are not fixed.

Standard Cost

An estimated or pre-determined cost of manufacturing a product or performing a service, used for budgeting and performance evaluation.

Variable Manufacturing Overhead

Indirect production costs that fluctuate with the level of production output, such as utilities for the manufacturing plant.

Direct Labor-Hours

The total number of hours worked by employees directly involved in manufacturing goods or providing services.