In Perpetual Inventory System with Process Costing,the Cost of Units

question 94

Multiple Choice

In perpetual inventory system with process costing,the cost of units sold is recorded by debiting Cost of Goods Sold and crediting ________.

• A) Finished Goods Inventory
• B) Sales Revenue
• C) Work-in-Process Inventory
• D) Wages Payable

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Definitions:

Underapplied Manufacturing Overhead

The situation where the allocated manufacturing overhead costs are less than the actual costs incurred.

Overapplied Manufacturing Overhead

The condition where the allocated manufacturing overhead costs exceed the actual overhead expenses incurred during a period.

Manufacturing Overhead Account

An accounting term referring to all indirect costs associated with manufacturing a product, such as utilities, depreciation, and salary of indirect labor.

Direct Labor

Labor costs that are directly attributable to the production of goods or services, such as wages for workers manufacturing a product.