When Closing Overapplied Manufacturing Overhead to Cost of Goods Sold

question 148

Multiple Choice

When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would be true?

• A) Work in Process will decrease.
• B) Cost of Goods Sold will increase.
• C) Net income will decrease.
• D) Gross margin will increase.

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Definitions:

Total Activity

The measure of the total amount of work or production completed in a specific period.

Activity Cost Pool

A collection of costs grouped together based on similar cost drivers or activities, used in activity-based costing to allocate costs more accurately.

Activity Rate

A measure used in cost accounting to allocate overhead costs to products or services based on specific activities or processes.

Product R0

Tends to refer to an initial product concept or prototype, but not a standard key term. NO.