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Appropriate method for allocation of under- applied or over- applied depend on :-

A- maturity of amount 

B- COGS only 

C- finished goods inventory only 

D - Both answers B& C 

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Question ajoutée par Ahmed kandil , Cost Controller , Battour Holding Cpompany
Date de publication: 2015/03/10
Mir Mujtaba Ali
par Mir Mujtaba Ali , Internal Audit Manager , Confidential

The treatment of the under applied or over applied overhead depends on the materiality of the amount. If it is immaterial it can be moved to cost of goods sold. If it is material, it is apportioned among work in process inventory, finished goods inventory, and cost of goods.

Ahmed kandil
par Ahmed kandil , Cost Controller , Battour Holding Cpompany

Correct answer is number A

Anas  Dawah
par Anas Dawah , Senior Internal Auditor , Talal Abu-Ghazaleh Global (TAGI)

M.O.H will be applied or allocated to inventories on hand ( part of it will be sold (C.G.S) and the remaining will be ending Inventory for the period ) , so the over or under applied M.O.H Will depend on both C.G.S and  ending Inventory

Muhammad Asif
par Muhammad Asif , Accountant , Prestige Plastics LLC

COGS only because its cost budget and applied to cost of goods sold only.

 

 

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