In a job-order costing system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period:
A) is deducted on the Income Statement as overapplied overhead.
B) is closed to Cost of Goods Sold.
C) is transferred to Finished Goods at the end of the period.
D) is part of the ending balance of the Work in Process inventory account.

Question

Quizplus · Accepted Answer

In a job-order costing system, overhead costs are applied to jobs as they are worked on. If a job remains incomplete at the end of a period, the amount of overhead cost that has been applied to the job is still part of the Work in Process inventory account. Therefore, the correct answer is D - it is part of the ending balance of the Work in Process inventory account.

In a Job-Order Costing System, the Amount of Overhead Cost