Which of the following statements regarding manufacturing overhead allocation is true?
A) It includes all manufacturing costs that cannot be directly traced to a product or service.
B) The costs can be grouped only as a single indirect-cost pool.
C) Total costs are unknown at the end of the accounting period.
D) Allocated amounts are debited to Manufacturing Overhead Control.

Question

Quizplus · Accepted Answer

Manufacturing overhead allocation includes all manufacturing costs that cannot be directly traced to a product or service, such as rent, utilities, and factory maintenance costs. These costs are grouped into various indirect cost pools and allocated to products or services based on a predetermined cost allocation method. The total costs for the accounting period can be determined by adding together the actual direct costs and the allocated indirect costs. The allocated amounts are debited to the specific product’s Manufacturing Overhead Control account.

Which of the Following Statements Regarding Manufacturing Overhead Allocation Is