This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain the procedure how overhead indirect costs become a part of work-in process inventory. ... (Read 108 times)

asd123

  • Hero Member
  • *****
  • Posts: 557
on: Jul 5, 2018
Explain the procedure how overhead indirect costs become a part of work-in process inventory.
 
  What will be an ideal response?

Question 2

Why does the manufacturing overhead control account (debit) need to equal the manufacturing overhead allocated account (credit)?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ririgirl15

  • Sr. Member
  • ****
  • Posts: 385
Reply #1 on: Jul 5, 2018
Answer to Question 1

Answer: The overhead (indirect) costs cannot be easily traced to individual jobs. Manufacturing overhead costs, therefore, are first accumulated in a manufacturing overhead account and then allocated to individual jobs. As manufacturing overhead costs are allocated, they become part of work-in-process inventory.

Answer to Question 2

Answer: If these accounts do not equal, then overhead has either been overallocated or underallocated. Either situation means that the cost of the cost object has not been correctly estimated during the period. Evaluation of profitability will be incorrect depending on the materiality of the difference between the two accounts.


asd123

  • Member
  • Posts: 557
Reply 2 on: Jul 5, 2018
Wow, this really help

duy1981999

  • Member
  • Posts: 341
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

Everyone has one nostril that is larger than the other.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

Barbituric acid, the base material of barbiturates, was first synthesized in 1863 by Adolph von Bayer. His company later went on to synthesize aspirin for the first time, and Bayer aspirin is still a popular brand today.

Did you know?

Today, nearly 8 out of 10 pregnant women living with HIV (about 1.1 million), receive antiretrovirals.

Did you know?

Critical care patients are twice as likely to receive the wrong medication. Of these errors, 20% are life-threatening, and 42% require additional life-sustaining treatments.

A hypothetical scenario illustrating the process of chemical selection A hypothetical scenario illustrating the process of chemical selection
The fuel pickup tube is part of the fuel sender and pump assembly. The fuel pickup tube is part of the fuel sender and pump assembly.
How to convert one unit of measurement to another unit (Part 1) How to convert one unit of measurement to another unit (Part 1)
Math work Math work
A company that makes environmental measuring devices has calculated their revenue and costs as ... A company that makes environmental measuring devices has calculated their revenue and costs as ...
Inadequate Airway, Breathing and Circulation in the Trauma Patient (Part 3) Inadequate Airway, Breathing and Circulation in the Trauma Patient (Part 3)
Video: Structures that affect circulation - venous return

For a complete list of videos, visit our video library