When Closing Overapplied Manufacturing Overhead to Cost of Goods Sold

question 148

Multiple Choice

When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would be true?

• A) Work in Process will decrease.
• B) Cost of Goods Sold will increase.
• C) Net income will decrease.
• D) Gross margin will increase.

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Definitions:

Funding

The act of providing financial resources to finance a need, program, or project.

Raw Materials

The basic substances or components used in the production or manufacturing of goods.

Contractor

An individual or company that undertakes a contract to provide materials or labor to perform a service or do a job.

Employee

An individual who works part-time or full-time under a contract of employment, providing their services in exchange for compensation.