Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 3 - Job-Order Costing - Questions - Page 113: 3-7

Answer

If a company fully allocates all of its overhead costs to jobs, this does not guarantee that a profit will be earned for the period. Allocation of overhead costs to jobs does not result in sale of the products. The profit will be earned only when there is a sale of the products (selling to customers) and not just the allocation of costs.

Work Step by Step

--
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.

GradeSaver will pay $15 for your literature essays
GradeSaver will pay $25 for your college application essays
GradeSaver will pay $50 for your graduate school essays – Law, Business, or Medical
GradeSaver will pay $10 for your Community Note contributions
GradeSaver will pay $500 for your Textbook Answer contributions