Applying Overhead to Products Means

question 43

Multiple Choice

Applying overhead to products means:

• A) passing on the overhead costs to customers in the price charged.
• B) assigning the overhead on a basis that closely relates it to the work performed.
• C) directly tracing the overhead to products.
• D) calculating the total overhead cost.

---

Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Year 1

Refers to the first year of operation for a business or the first year of a specific reporting period.

Contra-asset

A contra-asset account is a type of asset account where its balance is a negative figure that offsets the balance of its corresponding asset account.

Liability

A financial obligation or debt owed by a company to another entity, which is expected to be settled through the transfer of assets or services.