In a job-order cost system, the application of manufacturing overhead usually would be recorded as a debit to
A)Cost of Goods Sold.
B)Work in Process Stock.
C)Manufacturing Overhead.
D)Finished Goods Stock.

Question

Quizplus · Accepted Answer

In a job-order cost system, manufacturing overhead costs are allocated to individual jobs based on an overhead rate. As the overhead costs are incurred, they are debited to the Manufacturing Overhead account. However, these costs are not recorded as expenses until they are applied to specific jobs. The application of manufacturing overhead to a job is recorded as a debit to Work in Process Stock, which represents the total costs of all jobs in progress at a given time. Therefore, the correct option is B.

In a Job-Order Cost System, the Application of Manufacturing Overhead