If the difference between overhead applied and actual overhead is insignificant, it is usually written off to
a. Work in Process Inventory.
b. Cost of Goods Sold.
c. Finished Goods Inventory.
d. Materials Inventory.
Costs assigned to the building of a ship should appear on the income statement when
a. the ship is completed.
b. the ship is sold.
c. the purchase order to manufacture the ship is received.
d. cash is collected for the sale of the ship.
If the difference between overhead applied and actual overhead is insignificant, it is usually written off to
b. Cost of Goods Sold..
Explanation
At the end of the period, it is possible to compare the actual overhead costs with the predetermined estimates. The actual difference between the actual overhead costs and the applied overhead costs is called the overhead variance. This overhead variance can only be computed after the actual overhead costs for the period are known and it is usually written off to Cost of Goods Sold.
Costs assigned to the building of a ship should appear on the income statement when
b. the ship is sold.
Explanation
In Job order costing ganerally it should not recognize any of the manufacturing costs on their year end income statement. These are product costs and as a result, will not appear on the income statement until the product are sold and the revenue is earned.So in the prasent case . Costs assigned to the building of a ship should appear on the income statement when the ship is sold.
