What Effect Does Recognizing an Accrued Liability for Utilities at the End

question 11

Multiple Choice

What effect does recognizing an accrued liability for utilities at the end of the accounting period have on the accounting equation?

• A)Assets decrease and stockholders' equity decreases.
• B)Liabilities increase and stockholders' equity increases.
• C)Assets decrease and liabilities decrease.
• D)Liabilities increase and stockholders' equity decreases.

Analyze and calculate variable manufacturing overhead variances, including rate and efficiency variances.

Calculate and interpret direct labor variances, including rate and efficiency variances.

Determine the impact of actual direct labor hours and rates on standard costing.

Understand the concept of applying fixed and variable overhead based on standard activity bases.

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Definitions:

Work In Process Inventory

Items or goods in the production process but not yet completed; a stage between raw materials and finished goods.

Predetermined Rate

A rate established before the performance or production process begins, often used in costing to estimate or allocate costs.

Manufacturing Overhead

All manufacturing costs that are not directly related to the production of goods, including costs associated with running the factory such as utilities, maintenance, and factory equipment.

Predetermined Overhead Rate

A predetermined overhead rate is calculated by dividing estimated overhead costs by an allocation base, such as direct labor hours, used to allocate overhead costs to products or job orders.