When overhead is underapplied at the end of a period,the adjusting journal entry includes a credit to Cost of Goods Sold.

Name: When overhead is underapplied at the end of a period,the adjusting journal entry includes a credit to Cost of Goods Sold.
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When overhead is underapplied, the adjusting journal entry typically includes a debit to Cost of Goods Sold (to increase the expense) and a credit to Manufacturing Overhead (to clear the underapplied amount).

When Overhead Is Underapplied at the End of a Period,the