Question

4) The required adjustment at the end of the period for an underallocation (under
estimation) of manufacturing overhead results in a
a) credit to Cost of Goods Sold
b) debit to Cost of Goods Sold
c) credit to direct materials
d) debit to MOH

5) When do product costs become expenses?
a) when the manufacturing process begins
b) when the manufacturing process is completed
c) when the direct materials are purchased
d) when the finished units in inventory are sold

6) Which of the following is not a suggested base for allocating manufacturing
overhead?
a) direct labor hours
b) total product cost
c) direct labor dollars
d) machine hours

Answer 1

4) The required adjustment at the end of the period for an underallocation (under
estimation) of manufacturing overhead results in a

Date	accounts & explanation	debit	credit
	Cost of goods sold
	Manufacturing overhead

so answer is b) debit to Cost of Goods Sold

5) Product cost becomes expenses when finished goods inventory is sold product should be recongized as cost of goods sold as expense

so answer is d) when the finished units in inventory are sold

6) Manufacturing overhead can be allocated on direct labour hours, direct labour dollars or machine hours but can not be allocated on total product cost.

so answer is b) total product cost