Overallocation of Manufacturing Overhead Would Require Which of the Following

question 31

Multiple Choice

Overallocation of manufacturing overhead would require which of the following year-end adjustments?

• A) A credit to Finished goods inventory
• B) A credit to Manufacturing overhead
• C) A credit to Cost of sales
• D) A debit to Work in process inventory

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Definitions:

Cash Flowing

The movement of money in and out of a business, representing its operational liquidity.

Expenses

Costs incurred during the operation of a business that are necessary for generating revenue, such as rent, salaries, utilities, and materials.

Residual Value

The estimated value of a fixed asset at the end of its useful life.

Useful Life

The estimated lifespan of a depreciable asset during which it can be expected to contribute to company operations.