When Closing Overapplied Manufacturing Overhead to Cost of Goods Sold

question 35

Multiple Choice

When closing overapplied manufacturing overhead to cost of goods sold, which of the following would be true?

• A)Work in process will be decreased.
• B)Cost of goods sold will be increased.
• C)Net income will be decreased.
• D)Gross margin will be increased.

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Definitions:

Currency Futures

Financial contracts to exchange a specified amount of a currency at a predetermined future date and price, used to hedge against or speculate on currency movements.

Non-amortized Debt

Debt that is not regularly reduced through payments covering principle and interest over time.

Interest Payments

Interest payments are the regular payments made to a lender by a borrower for the use of borrowed money, typically calculated as a percentage of the principal.

Principal

The original sum of money borrowed in a loan or the initial amount of investment, exclusive of any interest or dividends.