If overhead was overapplied during the accounting period by an insignificant amount,the entry to close the Manufacturing Overhead account will include a:
A) Debit to Cost of Goods Sold and a credit to Manufacturing Overhead.
B) Debit to Cost of Goods Sold and a credit to Finished Goods Inventory.
C) Debit to Manufacturing Overhead and a credit to Cost of Goods Sold.
D) Debit to Finished Goods Inventory and a credit to Manufacturing Overhead.

Question

Quizplus · Accepted Answer

When overhead is overapplied, it means that the actual manufacturing overhead costs were less than the overhead costs allocated to products. The adjustment typically involves a debit to the Manufacturing Overhead account to reduce its balance to zero and a credit to Cost of Goods Sold to reflect the decrease in production costs.

If Overhead Was Overapplied During the Accounting Period by an Insignificant