At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:
A) transferred to Work-in-Process.
B) transferred to Cost of Goods Sold.
C) transferred to Finished Goods.
D) allocated between Work-in-Process and Finished Goods.

Question

Quizplus · Accepted Answer

If the balance in Factory Overhead is small at the end of the fiscal year, it indicates that all or most of the overhead costs have been allocated to either Work-in-Process or Finished Goods. Therefore, the remaining balance in Factory Overhead should be transferred to Cost of Goods Sold as it represents the overhead costs that have not been assigned to any specific product.

At the End of the Fiscal Year, If the Balance