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 105 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
Excellent

skipfourms123

  • Member
  • Posts: 343
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

About one in five American adults and teenagers have had a genital herpes infection—and most of them don't know it. People with genital herpes have at least twice the risk of becoming infected with HIV if exposed to it than those people who do not have genital herpes.

Did you know?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Did you know?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

The Periodic Table (Part 2) The Periodic Table (Part 2)
Plasmodesmata (Part 2) Plasmodesmata (Part 2)
Shen Zhou, Poet on a Mountaintop, leaf from an album of landscapes, painting mounted as part of a ... Shen Zhou, Poet on a Mountaintop, leaf from an album of landscapes, painting mounted as part of a ...
Breakup of the Larsen B Ice Shelf (part 2) Breakup of the Larsen B Ice Shelf (part 2)
Inadequate Airway, Breathing and Circulation in the Trauma Patient (Part 1) Inadequate Airway, Breathing and Circulation in the Trauma Patient (Part 1)
Question 37 Part 2 Question 37 Part 2
Video: Rods and Cones Animation

For a complete list of videos, visit our video library