Beta Company Determined That Its Manufacturing Overhead for the Current

question 98

Multiple Choice

Beta Company determined that its manufacturing overhead for the current accounting period was overapplied by $1,400.It closed the amount to cost of goods sold.The recognition of this transaction will:

• A) Decrease cost of goods sold.
• B) Increase cost of goods sold.
• C) Have no impact on cost of goods sold.
• D) None of these answers are correct.

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Definitions:

Monthly Dollar Sales

The total sales revenue earned by a business within a month, measured in dollars.

Variable Expenses

Costs that change in proportion to the activity of a business, such as sales or production levels.

Fixed Expenses

Costs that do not change in total despite fluctuations in the volume of goods or services produced or sold.

Annual Sales

The total revenue generated from the sale of goods or services in one fiscal year.