The following information relates to Wells Fargo for July 2008:

Actual direct labour hours $80,000

actual direct labour per hour $8

factory overhead rate per direct labour hour $12

factory overhead incurred $160,000

Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period, which of the following would be the entry to the cost of goods sold account?

A $80 000 debit B. $80 000 credit C. $40 000 credit D. $40 000 debit