In a Job-Order Costing System, the Amount of Overhead Cost

question 88

Multiple Choice

In a job-order costing system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period:

• A) is deducted on the Income Statement as overapplied overhead.
• B) is closed to Cost of Goods Sold.
• C) is transferred to Finished Goods at the end of the period.
• D) is part of the ending balance of the Work in Process inventory account.

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Definitions:

Financial Statements

Standardized documents that provide an overview of a company's financial performance and position, including the balance sheet, income statement, and cash flow statement.

Operating

Pertains to the regular, ongoing activities of a business that are involved in the production or sale of goods and services.

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, rules and procedures defined by the professional accounting industry, used to compile financial statements.

FASB

The Financial Accounting Standards Board, an organization that establishes financial accounting and reporting standards in the United States.