I have a small business that manufacturing assembled watches. The manufacturing costs includes overhead with a utility bill for the month. This is manufacturing overhead, MOH. The MOH is applied with use of direct labor hours. In the month of December, no end item products were sold to customers. I did have a utility bill for January. Is this an example of cash basis or accrual and the matching concept?
The question is simple as it relates to cash basis or accrual.