CA Inter P4 · Chapter 7 · Question 5 of 8
The entry to record factory overheads absorbed into production in the cost ledger is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Dr Work-in-Progress Control A/c; Cr Factory Overhead Control A/c
Explanation
Overheads actually incurred are debited to Factory Overhead Control. When they are absorbed into production at the predetermined rate, Work-in-Progress Control is debited and Factory Overhead Control credited. Any balance left on the overhead control account represents under- or over-absorption.
More Cost Accounting Systems MCQs
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