Beta Company Determined That Its Manufacturing Overhead for the Current

question 80

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.

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Definitions:

Direct Materials

Raw materials that can be directly identified with the production of specific goods or services.

Merchandising Companies

Enterprises engaged in the business of buying merchandise from manufacturers and selling it to customers, typically involving retail or wholesale operations.

Manufacturing Companies

Businesses that produce goods from raw materials through the use of manual labor or machinery, often involving assembly processes.

Cost of Goods Manufactured

The total production cost of goods completed during an accounting period, including labor, material, and overhead costs.