Each time jobs are completed, the entire balance in manufacturing overhead is transferred to finished goods inventory.

Question

Quizplus · Accepted Answer

The entire balance in manufacturing overhead is not always transferred directly to finished goods inventory upon job completion. Instead, the manufacturing overhead is applied to work in process (WIP) based on a predetermined overhead rate, and then the cost of completed jobs (including applied overhead) is transferred from WIP to finished goods inventory.

Each Time Jobs Are Completed, the Entire Balance in Manufacturing