Which of the following is correct with respect to closing out overapplied 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. Ob. The balance in the Work-in-Process account after allocation will be the same under either method. Cost of Goods Sold will be lower if the overapplied overhead is closed out by allocating it to the inventory accounts as well a O C. to Cost of Goods Sold. O d. The balance in the Work-in-Process account after allocation will be higher if the overapplied overhead is closed out by allocating it to all appropriate accounts. O e. Operating income will be higher if all of the overapplied overhead is closed out to Cost of Goods Sold. The total conversion cost for company XYZ was five times the prime cost. The direct labor cost was $40,000 while the direct materi cost was $20,000. How much was the manufacturing overhead cost ($)? a. 280,000 O b. 260,000 O C. 100,000 d. 300,000 None of the given answers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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