At the end of the year any balance in the Manufacturing Overhead account is generally eliminated by adjusting

Question

Quizplus · Accepted Answer

The Manufacturing Overhead account represents indirect costs incurred during the production process, such as rent and utilities. These costs cannot be directly traced to a particular job or product, so they are allocated to all of the products manufactured based on a predetermined overhead rate. At the end of the year, any remaining balance in the Manufacturing Overhead account is closed out or eliminated by adjusting the Cost of Goods Sold account. This is done to ensure that all indirect costs are properly allocated to the products sold during the year, and to accurately reflect the true cost of goods sold. Therefore, the correct answer is C.

At the End of the Year Any Balance in the Manufacturing