Which of the following statements is false?

a. Actual overhead costs always enter the Work-in-Process account.

b. The use of normal costing means that overhead is applied to each job using a predetermined rate.

c. Indirect labor is assigned as a part of overhead.

d. The cost of a job includes direct materials, direct labor, and applied overhead.

e. None of these choices are correct.

Question

Business

Tania Malone

6 July, 19:16

Which of the following statements is false?

a. Actual overhead costs always enter the Work-in-Process account.

b. The use of normal costing means that overhead is applied to each job using a predetermined rate.

c. Indirect labor is assigned as a part of overhead.

d. The cost of a job includes direct materials, direct labor, and applied overhead.

e. None of these choices are correct.

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Answers (1)

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Orion · Answer 1

Which of the following statements is false?

a. Actual overhead costs always enter the Work-in-Process account.

Explanation:

a. Actual overhead costs always enter the Work-in-Process account.

A normal job-order costing system is a system that uses: Actual costs for direct materials and direct labor and estimated costs for overhead. Actual overhead costs are not assigned directly to jobs

b. The use of normal costing means that overhead is applied to each job using a predetermined rate.

The cost of a job includes direct materials, direct labor, and applied overhead. The use of normal costing means that overhead is applied to each job using a predetermined rate.

c. Indirect labor is assigned as a part of overhead.

Since direct materials and direct labor are usually considered to be the only costs that directly apply to a unit of production, manufacturing overhead is (by default) all of the indirect costs of a factory. Manufacturing overhead does not include any of the selling or administrative functions of a business