In a Process Costing System, Some of the Increases to Department

question 114

Multiple Choice

In a process costing system, some of the increases to Department B's Work in Process Inventory account would come from Department A's

• A) Finished Goods Inventory account.
• B) Materials Inventory account.
• C) Cost of Goods Sold account.
• D) Work in Process Inventory account.

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Definitions:

Overapplied

A situation in cost accounting where the allocated overhead costs exceed the actual overhead costs.

Finished Goods Inventory

The stock of completed products that are ready to be sold.

Underapplied

Describes the situation where the allocated manufacturing overhead is less than the actual manufacturing overhead incurred.

Overapplied

A situation in which the allocated manufacturing overhead cost is more than the actual overhead cost incurred.