In a job-order costing system, manufacturing overhead applied is recorded as a debit to:

A) Raw Materials inventory.
B) Finished Goods inventory.
C) Work in Process inventory.
D) Cost of Goods Sold.

Question

In a job-order costing system, manufacturing overhead applied is recorded as a debit to:A) Raw Materials inventory.B) Finished Goods inventory.C) Work in Process inventory.D) Cost of Goods Sold.

Kristie Stodghill · Accepted Answer

Final Answer : C, Explanation :  Manufacturing overhead applied is a cost incurred in the production process but cannot be traced to a specific job or product. Therefore, it is assigned to all jobs based on a predetermined overhead rate. The account used to record this cost is Work in Process inventory, which is the account where all direct and indirect costs related to the production process are accumulated until the job is completed. Thus, choice C is the correct answer. Raw Materials inventory represents the cost of materials that have not yet been used in production, while Finished Goods inventory represents completed products that have not been sold. Cost of Goods Sold represents the cost of goods that have been sold and corresponds to the cost of the goods that have been completed and transferred from Finished Goods inventory.

In a job-order costing system, manufacturing overhead applied is recorded as a debit to:

A) Raw Materials inventory.
B) Finished Goods inventory.
C) Work in Process inventory.
D) Cost of Goods Sold.

Definitions

Learning Objectives

Learning Objectives

Related questions