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If manufacturing overhead has been overapplied during the year the adjusting entry at the end of the year will show a
A) debit to Manufacturing Overhead.
B) credit to Finished Goods Inventory
C) debit to Cost of Goods Sold.
D) credit to Work in Process Inventory.
Overapplied
Refers to a condition where the amount of costs allocated or applied to goods or services exceeds the actual costs incurred.
Manufacturing Overhead
All manufacturing costs that are not directly tied to a specific product or production activity, including utilities, rent, and salaries for supervisors.
Adjusting Entry
A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years.
- Obtain insight into the specifics of applied, actual, overapplied, and underapplied manufacturing overhead.
- Execute journal entries to adjust for over- or underapplied manufacturing overhead at year-end.
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Learning Objectives
- Obtain insight into the specifics of applied, actual, overapplied, and underapplied manufacturing overhead.
- Execute journal entries to adjust for over- or underapplied manufacturing overhead at year-end.
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