Estimated overhead and direct labor costs for the year were $250,000 and $125,00

Question

Estimated overhead and direct labor costs for the year were $250,000 and $125,000, respectively. During the year, actual overhead was $248,000 and actual direct labor cost was $123,000. The entry to close the over- or under-applied overhead at year-end, assuming an immaterial amount, would include:
A debit to Cost of Goods Sold for $2,000.
A debit to Factory Overhead for $2,000.
A credit to Finished Goods Inventory for $2,000.
A debit to Goods in Process Inventory for $2,000.
A credit to Cost of Goods Sold for $2,000.

Explanation / Answer

If it's immaterial it just gets closed out to cost of goods sold, so since it was overapplied, a credit to cost of goods sold for 2,000.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.