If Manufacturing Overhead Has Been Overapplied During the Year the Adjusting

question 130

Multiple Choice

If manufacturing overhead has been overapplied during the year the adjusting entry at the end of the year will show a

• A) debit to Manufacturing Overhead.
• B) credit to Finished Goods Inventory
• C) debit to Cost of Goods Sold.
• D) credit to Work in Process Inventory.

---

Definitions:

Unit Product Cost

The overall expense involved in creating one unit of a product, encompassing direct materials, direct labor, and distributed overhead costs.

Absorption Costing

An accounting method that includes all manufacturing costs (both variable and fixed) in the cost of a product.

Variable Costing

An accounting method that includes only variable costs in product cost calculations and treats fixed costs as period costs.

Unit Product Cost

The cost associated with producing a single unit of product, which includes direct materials, direct labor, and manufacturing overhead expenses.