The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:
A) Cost of Goods Sold.
B) Finished Goods Inventory.
C) Work in Process Inventory.
D) Indirect Labor.
E) Jobs Overhead Expense.

Question

Quizplus · Accepted Answer

Overhead costs are incurred throughout the production process, and the overhead cost applied to a job during a period is assigned to Work in Process Inventory. This is because the job is still in progress and has not yet been completed or sold, so it cannot be assigned to Cost of Goods Sold or Finished Goods Inventory. Additionally, the debit must be made to an inventory account, not an expense account like Indirect Labor or Jobs Overhead Expense.

The Overhead Cost Applied to a Job During a Period