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 96 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
:D TYSM

amandanbreshears

  • Member
  • Posts: 320
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

If all the neurons in the human body were lined up, they would stretch more than 600 miles.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

Did you know?

Stevens-Johnson syndrome and Toxic Epidermal Necrolysis syndrome are life-threatening reactions that can result in death. Complications include permanent blindness, dry-eye syndrome, lung damage, photophobia, asthma, chronic obstructive pulmonary disease, permanent loss of nail beds, scarring of mucous membranes, arthritis, and chronic fatigue syndrome. Many patients' pores scar shut, causing them to retain heat.

Decapods, from Ernst Haeckel's 1904 work Kunstformen der Natur Decapods, from Ernst Haeckel's 1904 work Kunstformen der Natur
Paranasal sinuses are part of the upper respiratory system. Paranasal sinuses are part of the upper respiratory system.
Recovery process of ancient DNA. Recovery process of ancient DNA.
Upstream Process - Inoculum Preparation & Expansion Upstream Process - Inoculum Preparation & Expansion
Diffusion as an entropy-driven process Diffusion as an entropy-driven process
Myosin V and kinesin I work together to deliver cargo Myosin V and kinesin I work together to deliver cargo
Video: Parkinson's Disease

For a complete list of videos, visit our video library