Question

A company has $10,000 under-applied overhead at the end of a given period. The following information is given: Account Ending balance Overhead applied in the account Work-in-process $100,000 $30,000 Finished goods $80,000 $20,000 Cost of goods sold $220,000 $50,000 The Manufacturing overhead control has a balance of some amount of x (not revealed) before closing. The Applied manufacturing overhead has a balance of some other amount of y (not revealed) before closing. The company uses the proration method to allocate the under-applied overhead to the above accounts. The necessary journal entry does not include a: A. debit to Work-in-process for $3,000. B. credit to Cot of Goods Sold for $5,000. C. debit to Applied manufacturing overhead for $y.

Answer 1

debit to Finished goods for $2.500

Step-by-step explanation:

The distribution of overhead applied in the account for different accounts is shown below:

Accounts Overhead applied percentage

Work in process $30,000 30%

Finished goods $20,000 20%

Cost of goods sold $50,000 50%

Total $100,000 100%

Now the underapplied allocation is as follows

Work in process $3,000 30%

Finished goods $2,000 20%

Cost of goods sold $5,000 50%

Total $10,000 100%

hence, the correct answer is shown above