Factory overhead must be applied to work in process at the end of the year, even though those jobs are not yet finished.

Question

Quizplus · Accepted Answer

Factory overhead is applied to work in process at the end of the accounting period to ensure that the costs of the overhead are allocated to the jobs that incurred them, even if those jobs are not yet completed. This is done as part of the process of determining the cost of goods sold and inventory valuation.

Factory Overhead Must Be Applied to Work in Process at the End