Niebla Corporation Has Provided Data Concerning the Corporation's Manufacturing Overhead

question 251

Multiple Choice

Niebla Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $72,000 and the total of the credits to the account was $77,000. Which of the following statements is true?

• A) Manufacturing overhead applied to Work in Process for the month was $72,000.
• B) Actual manufacturing overhead for the month was $72,000.
• C) Manufacturing overhead for the month was underapplied by $5,000.
• D) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $77,000.

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Definitions:

Direct Materials

The raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the production cost.

Direct Labor

The wages or salaries paid to employees who are directly involved in producing goods or providing services.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as utilities, rent, and salaries for managers.

Direct Labor

The labor costs directly traceable to the production of goods, including wages of workers on the production line.