When underapplied or overapplied manufacturing overhead is prorated, amounts can be assigned to which of the following accounts?
A) Raw-Material Inventory, Manufacturing Overhead, and Direct Labor.
B) Cost of Goods Sold, Work-in-Process Inventory, and Finished-Goods Inventory.
C) Work-in-Process Inventory, Raw-Material Inventory, and Cost of Goods Sold.
D) Raw-Material Inventory, Finished-Goods Inventory, and Cost of Goods Sold.
E) Raw-Material Inventory, Work-in-Process Inventory, and Finished-Goods Inventory.

Question

Quizplus · Accepted Answer

When underapplied or overapplied manufacturing overhead is prorated, the amounts can be assigned to Cost of Goods Sold, Work-in-Process Inventory, and Finished-Goods Inventory. This is because these accounts directly relate to the production and sale of goods, where manufacturing overhead is applied.

When Underapplied or Overapplied Manufacturing Overhead Is Prorated, Amounts Can