The adjustment of underapplied manufacturing overhead cost results in: O a. decrease in net operating income. O b. increase in net operating income. C. none of the given answers O d. decrease in cost of goods sold
The adjustment of underapplied manufacturing overhead cost results in: O a. decrease in net operating income. O b. increase in net operating income. C. none of the given answers O d. decrease in cost of goods sold
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The adjustment of underapplied manufacturing
overhead cost results in:
O a. decrease in net operating income.
O b. increase in net operating income.
c.
none of the given answers
O d. decrease in cost of goods sold
Transcribed Image Text:Time left 1:58:
Which of the following is correct with respect to closing
out underapplied manufacturing overhead to Cost of
Goods Sold versus closing it out to Work-in-Process
Inventory, Finished Goods Inventory, and Cost of Goods
Sold?
O a.
None of given answer is correct.
O b. Operating income will be higher if all of the
underapplied overhead is closed out to Cost of
Goods Sold.
Cost of Goods Sold will be higher if the
underapplied overhead is closed out by
allocating it to the inventory accounts as well as
to Cost of Goods Sold.
O c.
d. The balance in the Work-in-Process account
after allocation will be the same under either
method.
O e. The balance in the Work-in-Process account
after allocation will be higher if the
underapplied overhead is closed out by
allocating it to all appropriate accounts.
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