The recording of the application of factory overhead costs to jobs would include a credit to
A) Factory Overhead
B) Wages Payable
C) Work in Process
D) Cost of Goods Sold

Question

Quizplus · Accepted Answer

Factory overhead costs are allocated to jobs, which increases the costs associated with those jobs. This allocation is recorded by debiting Work in Process (to reflect the increase in costs due to overhead) and crediting Factory Overhead (to reflect the decrease in the overhead costs that are now allocated). Thus, crediting Factory Overhead is part of the recording process.

The Recording of the Application of Factory Overhead Costs to Jobs