Question

Blender Company applied overhead. At the end of the year the following data were available:

Actual manufacturing overhead $115,000
Estimated manufacturing overhead $120,000
Applied manufacturing ovehead $118,000
What journal entry would be made to dispose of the overhead variance, assuming it is immaterial?
Overhead control $3,000
Cost of Goods Sold $3,000

Overhead control $5,000
Cost of Goods Sold $5,000

Cost of Goods Sold $3,000
Overhead control $3,000

Cost of Goods Sold $5,000
Overhead control 53,000

Answer 1

The correct journal entry to dispose of the overhead variance, assuming it is immaterial, would be a debit of $3,000 to Overhead Control and a credit of $3,000 to Cost of Goods Sold.

Step-by-step explanation:

The correct journal entry to dispose of the overhead variance, assuming it is immaterial, would be:

Overhead Control $3,000

Cost of Goods Sold $3,000

This journal entry reflects a debit of $3,000 to Overhead Control and a credit of $3,000 to Cost of Goods Sold. The Overhead Control account is being reduced by the amount of the overhead variance, and the Cost of Goods Sold account is being increased.