The Second Entry to Adjust Merchandise Inventory Includes

question 37

Multiple Choice

The second entry to adjust Merchandise Inventory includes:

• A)a debit to Merchandise Inventory.
• B)a credit to Merchandise Inventory.
• C)a debit to Income Summary.
• D)None of these are correct.

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Definitions:

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as rent and salaries.

Volume Variance

The difference between the budgeted and actual volume of production, affecting the budgeted levels of costs or revenues.

Budgeted

The process of creating a plan for a company's financial operations, encompassing revenue, expenses, and capital usage.

Direct Labor-Hours

A measure of the total hours worked by employees who are directly involved in the manufacturing or production process.