Which One of the Following Types of Inventory Accounts Would

question 126

Multiple Choice

Which one of the following types of inventory accounts would be used by a wholesaler or retailer?

• A) Merchandise inventory
• B) Finished goods inventory
• C) Work in process inventory
• D) Raw materials inventory

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, including costs related to running the manufacturing facilities that are not directly traceable to specific units of product.

Underapplied

Refers to the situation where the actual manufacturing overhead costs are greater than the overhead costs applied to products based on the predetermined overhead rate.

Unit Product Cost

The total cost to produce one unit of a product, including direct materials, direct labor, and allocated overhead.

Job-Order Costing

An accounting method that tracks manufacturing costs separately for each job or batch of products.