At the end of the fiscal year, the balance in Factory Overhead is small. The balance would be
A) transferred to Work in Process
B) transferred to Cost of Goods Sold
C) transferred to Finished Goods
D) allocated between Work in Process and Finished Goods

Question

Quizplus · Accepted Answer

The balance in Factory Overhead at the end of the fiscal year represents unapplied overhead costs. These costs should be allocated to products manufactured during the period. Since the fiscal year has ended, any unallocated overhead costs should be transferred to Cost of Goods Sold, which accounts for the cost of goods sold during the period. Therefore, the best choice is B, transferred to Cost of Goods Sold.

At the End of the Fiscal Year, the Balance in Factory