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Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory Finished Goods Inventory, and Cost of Goods Sold? Oa Cost of Goods Sold will be lower if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. balance in the Work- in-Process account after allocation will be the same under either method. None of given answer is correct. d. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be lower if the underapplied overhead is closed out by allocating it to all appropriate accounts

Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory Finished Goods Inventory, and Cost of Goods Sold? Oa Cost of Goods Sold will be lower if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. balance in the Work- in-Process account after allocation will be the same under either method. None of given answer is correct. d. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be lower if the underapplied overhead is closed out by allocating it to all appropriate accounts

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 2DQ: Which type of manufacturing cost (direct materials, direct labor, variable factory overhead, fixed...
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Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory Finished Goods Inventory, and Cost of Goods Sold? Oa Cost of Goods Sold will be lower if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. balance in the Work- in-Process account after allocation will be the same under either method. None of given answer is correct. d. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be lower if the underapplied overhead is closed out by allocating it to all appropriate accounts.
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