Initial Direct Costs Are

question 200

Multiple Choice

Initial direct costs are:

• A)non-refundable down payments made by the lessee.
• B)incremental costs incurred by the lessor in negotiating and consummating the lease agreement.
• C)insurance, property taxes, and maintenance costs.
• D)interest and annual lease rental paid.

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Definitions:

Overapplied Overhead

A condition in which the overhead costs assigned to manufacturing exceed the real overhead costs that were incurred.

Work in Process

Inventory that includes raw materials that have been partially worked on but are not yet completed goods in the manufacturing process.

Journal Entry

A record in the financial journals of a business that captures the financial transactions of the company, showing all accounts affected and their respective debit or credit balances.

Job-Order Costing

An accounting method that collects and assigns manufacturing costs to individual units or batches of production, suitable for customized products.