Tom's Textiles Shipped the Wrong Material to a Customer,who Refused

question 35

Multiple Choice

Tom's Textiles shipped the wrong material to a customer,who refused to accept the order.Upon receipt of the material,Tom's would credit Accounts Receivable and debit:

• A)Sales Revenue.
• B)Sales Discounts.
• C)Sales Returns.
• D)Sales Allowances.

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Definitions:

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of a product, including costs related to indirect materials, indirect labor, and other indirect expenses.

Overapplied Overhead

This occurs when the overhead allocated to products or job orders during a period exceeds the actual overhead costs incurred.

Manufacturing Overhead

Indirect costs associated with manufacturing, not directly tied to specific product units, such as equipment maintenance, factory rent, and management salaries.

Finished Goods

The final products that have completed the manufacturing process and are ready for sale.