In Determining Total Manufacturing Costs on the Cost of Goods

question 64

Multiple Choice

In determining total manufacturing costs on the cost of goods manufactured schedule

• A) beginning work in process inventory should have a zero balance.
• B) actual manufacturing overhead costs appear as a deduction.
• C) manufacturing overhead applied is added to direct materials and direct labor.
• D) ending work in process inventory is deducted from beginning work in process inventory.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, according to the rules of double-entry accounting.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet.

Credit

An arrangement whereby goods, services, or money is received in exchange for a promise to pay back a definite sum of money at a future date.

Supplies

Items used in the operations of a business, often consumable, such as office supplies or factory supplies, not directly part of the finished product.