Elegant Carpet Inc

question 7

Multiple Choice

Elegant Carpet Inc. agrees to sell a certain quantity of carpeting to Fabulous Floor stores under a shipment contract. Elegant must

• A) allow the buyer to reject the goods for any reason.
• B) deliver the goods to a particular destination.
• C) inspect the goods before shipping it.
• D) place the goods into the hands of a carrier.

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Definitions:

Underapplied Overhead

A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work in Process during a period.

Batch Setup

The process and costs associated with preparing equipment and operations for producing a set quantity of goods.

Manufacturing Overhead

All indirect factory-related costs incurred during the production process, excluding direct materials and direct labor costs.

Direct Labour-Hours

The total amount of time workers spend directly manufacturing a product or providing a service.