Simila Corporation has provided the following data for its most recent year of operation: Which of the following statements is true?
A)The amount of fixed manufacturing overhead released from inventories is $459,000
B)The amount of fixed manufacturing overhead deferred in inventories is $56,000
C)The amount of fixed manufacturing overhead released from inventories is $56,000
D)The amount of fixed manufacturing overhead deferred in inventories is $459,000

Question

Simila Corporation has provided the following data for its most recent year of operation:   Which of the following statements is true?
A)The amount of fixed manufacturing overhead released from inventories is $459,000 
B)The amount of fixed manufacturing overhead deferred in inventories is $56,000 
C)The amount of fixed manufacturing overhead released from inventories is $56,000 
D)The amount of fixed manufacturing overhead deferred in inventories is $459,000

Quizplus · Accepted Answer

The given data are most likely related to a schedule of cost of goods manufactured (COGM) or a similar schedule. The amount of fixed manufacturing overhead deferred in inventories is usually calculated by subtracting the fixed manufacturing overhead applied in the current period from the actual fixed manufacturing overhead incurred in the period. From the given data, we can see that the amount of fixed manufacturing overhead applied was $503,000 (the difference between the two numbers provided), and that the actual fixed manufacturing overhead incurred was $559,000 (the larger of the two numbers provided). Therefore, the amount of fixed manufacturing overhead deferred in inventories is $56,000 ($559,000 - $503,000). Choice B is correct. The other choices are not supported by the given data. Absorption costing unit product costs: 11ea7998_5db1_4564_911b_b35209314038_TB2627_00_TB2627_00 11ea7998_5db1_4565_911b_23d00c2fda1a_TB2627_00_TB2627_00

Simila Corporation Has Provided the Following Data for Its Most