Carson Inc. has provided the following data for the month of May. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

Manufacturing overhead for the month was underapplied by $10,000.
The company allocates any underapplied or overapplied overhead among work-in-process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied overhead for May would include a:
A) credit to Finished Goods Inventory of $900.
B) debit to Finished Goods Inventory of $29,200.
C) credit to Finished Goods Inventory of $29,200.
D) debit to Finished Goods Inventory of $900.

Question

Carson Inc. has provided the following data for the month of May. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

Manufacturing overhead for the month was underapplied by $10,000.
The company allocates any underapplied or overapplied overhead among work-in-process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied overhead for May would include a:
A) credit to Finished Goods Inventory of $900. 
B) debit to Finished Goods Inventory of $29,200. 
C) credit to Finished Goods Inventory of $29,200. 
D) debit to Finished Goods Inventory of $900.

Quizplus · Accepted Answer

The Answer of Carson Inc. has provided the following data for the month of May. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

Manufacturing overhead for the month was underapplied by $10,000.
The company allocates any underapplied or overapplied overhead among work-in-process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied overhead for May would include a:
A) credit to Finished Goods Inventory of $900. 
B) debit to Finished Goods Inventory of $29,200. 
C) credit to Finished Goods Inventory of $29,200. 
D) debit to Finished Goods Inventory of $900.