When applying fixed manufacturing overhead to production, the Work in Process inventory account will increase (decrease) by:

A) $83,800
B) ($83,800)
C) $126,560
D) ($126,560)

Question

When applying fixed manufacturing overhead to production, the Work in Process inventory account will increase (decrease) by:A) $83,800B) ($83,800)C) $126,560D) ($126,560)

Lamont Ragland · Accepted Answer

Final Answer : C, Explanation :  The specific amount of the fixed manufacturing overhead is not provided in the question, so we cannot determine the exact amount of the increase or decrease in the Work in Process inventory account. However, we know that fixed manufacturing overhead is a cost that is incurred during the production process and is allocated to the products being manufactured. Therefore, when fixed manufacturing overhead is applied to production, the Work in Process inventory account will increase. Since the only answer choice that indicates an increase is C, that is the correct choice. Work in Process increases by the standard amount of hours allowed for the actual output multiplied by the predetermined overhead rate, which is (22,600 units × 0.80 hours per unit)× $7.00 per hour = 18,080 hours × $7.00 per hour = $126,560.

When applying fixed manufacturing overhead to production, the Work in Process inventory account will increase (decrease) by:

A) $83,800
B) ($83,800)
C) $126,560
D) ($126,560)

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Related questions

When applying fixed manufacturing overhead to production, the Work in Process inventory account will increase (decrease) by:A) $83,800B) ($83,800) C) $126,560D) ($126,560)

Definitions

Learning Objectives

Learning Objectives

Related questions

When applying fixed manufacturing overhead to production, the Work in Process inventory account will increase (decrease) by:

A) $83,800
B) ($83,800)
C) $126,560
D) ($126,560)