Why is factory overhead 'applied' to products and jobs by manufacturing companies?

Question

Quizplus · Accepted Answer

Applying factory overhead to products and jobs allows managers to have a more timely determination of product costs during the manufacturing process. This helps to ensure that the costs of the products and jobs are accurately reflected in the company's financial statements, which is important for making informed business decisions. While option A is true, it is not the primary reason for applying factory overhead, as estimates are used to determine the amount of overhead to apply. Option B is not true, as indirect costs are not always easy to trace to products and jobs. Option D may be true, but it is not the primary reason for applying factory overhead.

Why Is Factory Overhead 'Applied' to Products and Jobs by Manufacturing