Q Inc. has provided the following data concerning last month's operations. Assume that overhead is allocated on the basis of DIRECT LABOR COST using a plantwide overhead rate. Also assume that any under/overapplied overhead is adjusted to COGS.

Q Inc. has provided the following data concerning last month's operations. Assume that overhead is allocated on the basis of DIRECT LABOR COST using a plantwide overhead rate. Also assume that any under/overapplied overhead is adjusted to COGS.
	Direct labor cost					$ 50,000
	Predetermined overhead rate					$ 2.00	per DLH
	Total actual overhead					$ 106,000
				Beginning	Ending
	Raw materials inventory			$ 18,000	$ 12,000
	Work in process inventory			$ 64,000	$ 46,000
	Finished goods inventory			$ 32,000	$ 40,000
LO3-1,2,3 ( point) Compute the direct materials used in production
	raw materials beginning			18,000
	Raw materials purchased			35,000
				53,000
				-12,000
	Cost of direct materials used in production			41,000
LO3-4 ( point each) Compute the under/overapplied overhead amount. Label the computed amount as either an underapplied or overapplied OH. Then, prepare the adjusting entry using T-accounts or journal entries.
LO3-1,2,3 ( point) Compute the cost of goods sold (after any adjustments for under/overapplied OH)
LO3-4 ( point) Regardless of your responses above, assume that there is an overapplied overhead amount. Will the adjusting entry to clear the overhead account increase, not affect, or decrease COGS? Briefly explain. No computations necessary.