At the End of the Year, Deltona Company Has a Preliminary

question 28

Multiple Choice

At the end of the year, Deltona Company has a preliminary debit balance in the Manufacturing overhead account of $3 950. Which of the following is the year- end adjusting entry needed to clear the balance to zero?

• A)Debit Work in process $3 950, credit Manufacturing overhead $3 950
• B)Debit Gross profit $3 950, credit Cost of sales $3 950
• C)Debit Cost of sales $3 950, credit Manufacturing overhead $3 950
• D)Debit Manufacturing overhead $3 950, credit Cost of sales

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Definitions:

Period Costs

Expenses that are not directly associated with manufacturing and are therefore recorded as expenses in the period in which they are incurred.

Factory Utilities

The costs associated with utilities consumed in the manufacturing process, such as electricity, water, and gas necessary for factory operations.

Product Cost

The total expenses incurred to produce and deliver a product, including direct materials, direct labor, and overhead.

Period Cost

Costs not directly associated with production, charged as expenses during the period they arise.