If It Is a Material Amount, Overapplied or Underapplied Overhead

question 108

Multiple Choice

If it is a material amount, overapplied or underapplied overhead should be disposed of by allocating it to:

• A) Cost of goods sold and finished goods inventory.
• B) Finished goods inventory and goods in process inventory.
• C) Goods in process inventory, finished goods inventory, and cost of goods sold.
• D) Goods in process inventory.
• E) Raw materials inventory, goods in process inventory, and finished goods inventory.

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Definitions:

Technologically Obsolete

A state in which a product, service, or method has become outdated due to advances in technology, making it less efficient or desirable compared to newer options.

Numerically Controlled

Pertaining to machines or processes that are operated by precise instructions coded in the form of numbers.

Simple Rate

Refers to a basic or straightforward percentage that does not involve compounding over time, typically in finance.

Salvage Value

Salvage value is the estimated residual value of an asset after it has reached the end of its useful life and is no longer useful for its original purpose.