Because the Happy Times Company used a budgeted indirect cost allocation rate for its manufacturing operations, the amount allocated ($200,000) was different from the actual amount incurred ($225,000). These were the respective ending balances in the Manufacturing Overhead Allocated and Manufacturing Overhead control accounts. Before disposition of under/overallocated overhead, the following information was available:

	AccountBalance	Overhead Allocated Included
Direct materials	$60,000	$nil
WIP	$190,000	$10,000
Finished goods	$250,000	$20,000
Cost of goods sold	$560,000	$170,000

What is the journal entry Happy Times Company should use to write off the difference between allocated and actual overhead directly to cost of goods sold?

Question 3Select one:

a.

Cost of Goods Sold	25,000
Manufacturing Overhead Allocated	200,000
Manufacturing Overhead Control	225,000

b.

Cost of Goods Sold	25,000
Manufacturing Overhead Control	200,000
Manufacturing Overhead Allocated	225,000

c.

Manufacturing Overhead Control	25,000
Cost of Goods Sold	25,000

d.

Cost of Goods Sold	25,000
Manufacturing Overhead Allocated	25,000

e.

Manufacturing Overhead Allocated	25,000
Cost of Goods Sold	25,000