TABLE 21.1 Use the Information to Answer Following Question(s)

question 10

Multiple Choice

TABLE 21.1
Use the information to answer following question(s) .
Polaris Corporation Balance Sheet December 31, 20xx
-Refer to Table 21.1. If Polaris increases inventory by $10,000 and A/P also by $10,000, the net change in NWC is ________.

• A)$20,000
• B)$10,000
• C)$0
• D)none of the above

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Definitions:

Overapplied

Refers to a situation where the manufacturing overhead allocated to products is more than the actual manufacturing overhead incurred.

Underapplied

Describes a situation in cost accounting when the allocated manufacturing overhead costs are less than the actual overhead incurred, leading to a discrepancy that needs adjustment.

Job-Order Costing System

A costing system used to accumulate and assign costs to custom orders, projects, or jobs, typically in manufacturing or services.

Overapplied

When the overhead cost allocated to products exceeds the actual overhead costs incurred, requiring adjustment.