At the Year End Inventory Count, If Goods in Transit

question 49

Multiple Choice

At the year end inventory count, if goods in transit are shipped FOB destination, they should be included in the inventory count of

• A) The seller
• B) The buyer
• C) Neither the buyer nor the seller

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Definitions:

Labor-Hours

The total number of working hours clocked by employees within a specific period, reflecting the labor input.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of output on the basis of some common activity, such as machine-hours or labor hours.

Labor Cost

The total expense incurred by a company for the compensation of its employees.

Machine-Hours

A measure of the amount of time a machine is operated, used in cost accounting to allocate machine-related expenses to products.