In a job-order system,which of the following statements is TRUE?
A) The Work-in-Process Inventory account is increased by the actual factory overhead costs incurred for a job.
B) The Work-in-Process Inventory account is increased by the applied factory overhead costs for a job.
C) The Work-In-Process Inventory account is decreased by the budgeted amount of factory overhead costs for a job.
D) The Work-In-Process Inventory account is increased by the budgeted amount of factory overhead costs for a job.

Question

Quizplus · Accepted Answer

In a job-order system, the Work-in-Process Inventory account is increased by the applied factory overhead costs for a job. This means that predetermined overhead rates are used to apply overhead costs to each job based on estimated activity levels. Actual factory overhead costs incurred are recorded in a separate account and then reconciled against the applied overhead costs during the period-end closing process.

In a Job-Order System,which of the Following Statements Is TRUE