In a Service Firm, Overhead Is Generally Assigned to Services

question 41

Multiple Choice

In a service firm, overhead is generally assigned to services on an activity measure such as:

• A) Machine hours
• B) Billable hours
• C) Overhead hours
• D) Supplies used

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Definitions:

Work in Process Inventory

Goods that are in various stages of the production process but are not yet completed products.

Raw Materials Inventory

The stock of basic materials and components required to manufacture products.

Finished Goods Inventory

Goods that are fully manufactured but have not been purchased or sent out to buyers.

Cost of Goods Manufactured

The total cost of producing goods during a specific period, including costs associated with materials, labor, and overhead.