The Applied Overhead of a Job Is More Than the Actual

question 18

Multiple Choice

The applied overhead of a job is more than the actual overhead and it is considered immaterial by the company.An entry to record this would involve a

• A)debit to the Materials Inventory account.
• B)credit to the Overhead account.
• C)credit to the Cost of Goods Sold account.
• D)debit to the Work in Process Inventory account.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities they use.

Not A Product Cost

Indicates an expense not directly tied to the creation of products, such as administrative or sales expenses.

Direct Labor

Costs attributed to the workers directly involved in the production of goods or services.

Salespeople Commissions

The payment made to sales staff, usually calculated as a percentage of the sales they generate.