When Calculating the Total Amount of Manufacturing Overhead to Allocate

question 262

Multiple Choice

When calculating the total amount of manufacturing overhead to allocate to a particular job, the company would multiply each departmental overhead rate by ________ and then ________ together the allocated amounts from each department.

• A)the actual amount of the departmental allocation based used by the job; multiply
• B)the actual amount of the plantwide allocation based used by the job; add
• C)the actual amount of the departmental allocation based used by the job; add
• D)the actual amount of the plantwide allocation based used by the job; multiply

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Definitions:

Work in Process Inventory

Items that are in the process of being manufactured but are not yet complete, often tracked for cost accounting purposes.

Cost of Goods Sold

The straight costs associated with producing the goods that a company sells, which include labor and materials.

Days' Payable Outstanding

A financial metric that calculates the average number of days it takes a company to pay its invoices from trade creditors.

Accounts Payable

The amounts a business owes to its lenders or suppliers for transactions involving goods and services bought on credit.