Question

At the end of the accounting period, manufacturing overhead costs are applied to uncompleted jobs using the same predetermined overhead rate that is used to apply manufacturing overhead costs to completed jobs

a. True
b. False

Answer 1

The statement is true, as manufacturing overhead costs are applied to both completed and uncompleted jobs using the predetermined overhead rate established at the beginning of the accounting period.

Step-by-step explanation:

The statement is true. In cost accounting, whether a job is completed or not by the end of the accounting period, manufacturing overhead costs are applied using the predetermined overhead rate that was established at the beginning of the period. This rate is used to allocate overhead costs to both completed and uncompleted jobs based on actual levels of an allocation base, such as labor hours or machine hours. The use of a predetermined overhead rate helps in assigning manufacturing overhead costs consistently throughout the accounting period.