Fils Inc.has provided the following data for the month of March.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 $4,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for March would include the following:
A)debit to Cost of Goods Sold of $3,080
B)debit to Cost of Goods Sold of $149,410
C)credit to Cost of Goods Sold of $3,080
D)credit to Cost of Goods Sold of $149,410

Question

Fils Inc.has provided the following data for the month of March.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 $4,000. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for March would include the following:
A)debit to Cost of Goods Sold of $3,080 
B)debit to Cost of Goods Sold of $149,410 
C)credit to Cost of Goods Sold of $3,080 
D)credit to Cost of Goods Sold of $149,410

Quizplus · Accepted Answer

Allocating underapplied manufacturing overhead increases the balances in the inventory and cost of goods sold accounts, resulting in debits to those accounts. 11ea7998_5f0b_cc90_911b_bb3e7d40f7c4_TB2627_00_TB2627_00

Fils IncHas Provided the Following Data for the Month of March