When jobs are completed, the total cost of the job is recorded as a debit to Fin
ID: 2468664 • Letter: W
Question
When jobs are completed, the total cost of the job is recorded as a debit to Finished goods and a credit to Work in process. When jobs are completed, the total cost of the job is recorded as a debit to Finished goods and a credit to Work in process. During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $492,000 of manufacturing costs. Overhead costs have been underallocated. Overallocated manufacturing overhead occurs when the manufacturing overhead allocated to work in process inventory is less than the amount actually incurred.Explanation / Answer
17./
TRUE,
JOURNAL ENTRY WILL BE
FINISHED GOODS INVENTORY..................................DR
WORK IN PROCESS INVENTORY
18./
TRUE,
JOURNAL ENTRY WILL BE
FINISHED GOODS INVENTORY..................................DR
WORK IN PROCESS INVENTORY
19./
TRUE,
ACTUAL OVER HEAD INCURRED = $500000
LESS ALLOCATED = ($492000)
UNDER ALLOCATION OF OVERHEAD = $8000
20./
FALSE,
OVERALLOCATED MANUFACTURING OVERHEAD OCCURS WHEN THE MANUFACTURING OVERHEAD ALLOCATED TO WORK IN PROCESS INVENTORY IS MORE THAN THE AMOUNT ACTUALLY INCURRED.