Question
One Company uses a normal cost system. The overhead variance for the current period is $40,000 underapplied, and the amount is not material. The accounting
One Company uses a normal cost system. The overhead variance for the current period is $40,000 underapplied, and the amount is not material. The accounting system provides the following account balances.
Materials inventory $20,000
Work-in-process inventory 30,000
Finished goods inventory 20,000
Cost of goods sold 50,000
The entry to adjust for the overhead variance would include
A credit to cost of goods sold for $20,000 | ||
A debit to cost of goods sold for $20,000 | ||
A credit to cost of goods sold for $40,000 | ||
A debit to cost of goods sold for $40,000 |
One Company uses a normal cost system. The overhead variance for the current period is $40,000 overapplied, and the amount is not material. The accounting system provides the following account balances.
Materials inventory | $20,000 |
Work-in-process inventory | 30,000 |
Finished goods inventory | 20,000 |
Cost of goods sold | 50,000 |
The entry to adjust for the overhead variance would include
A credit to cost of goods sold for $40,000 | ||
A debit to cost of goods sold for $40,000 | ||
A debit to finished goods inventory for $8,000 | ||
A credit to finished goods inventory for $8,000 |
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