Before closing the manufacturing overhead account at the end of the year, Pine C

Question

Before closing the manufacturing overhead account at the end of the year, Pine Company reports the following account balances (all debits): $100,000 $200,000 $800,000 $3,000,000 $250,000 Raw materials inventory Work in process inventory Finished goods inventory Cost of goods sold Manufacturing overhead Assuming the amount in the manufacturing overhead account is material, the entry to correct the over or under-allocated manufacturing overhead will include a: Credit to cost of goods sold for $187,500 Credit to finished goods inventory for $50,000 Debit to work in process inventory for $12,500. Debit to cost of goods sold for $250,000. None of the above

Explanation / Answer

Debit to cost of goods sold for $250000

assuming that all the goods relating to this overhead are sold and it is underallocated manufacturing overhead.

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