1.Debbie's Bakery Company (DBC) incurred actual manufacturing overhead in 2012 of $1,000,000.During 2012, DBC applied $1,100,000 of manufacturing overhead to jobs.Which of the following statements is true:

a.The adjustment made for over/under applied manufacturing overhead will increase cost of goods sold by $100,000 and decrease net operating income by $100,000.

b.The adjustment made for over/under applied manufacturing overhead will decrease cost of goods sold by $100,000 but have no effect on net operating income.

c.The adjustment made for over/under applied manufacturing overhead will increase finished goods by $100,000 and decrease cost of goods sold by $100,000.

d.The adjustment made for over/under applied manufacturing overhead will decrease cost of goods sold and increase net operating income by $100,000.

e.There will be no adjustment made for over/under applied manufacturing overhead.