If Manufacturing Overhead Has Been Overallocated During the Period, and Most

question 192

Multiple Choice

If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

• A) cost of goods sold should be decreased.
• B) cost of goods sold should be increased.
• C) finished goods inventory should be increased.
• D) work in process inventory should be decreased.

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Definitions:

Allocation Base

A criterion or standard used to distribute costs among different cost objects, often used in the process of overhead allocation.

Single Cost Pool

A simplified accounting method that aggregates all costs into one category.

Activity-based Costing

An accounting method that assigns costs to products or services based on the activities and resources that go into producing them, providing precise cost information.

First Stage

The initial phase in a process or development where foundational elements are established.