Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 70% of direct Labour cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company:
-The entry to dispose of the under- or overapplied overhead cost for the month would include:

A)a credit of £100 to Cost of Goods Sold.
B)a credit of £6,000 to Manufacturing Overhead.
C)a debit of £6,000 to Cost of Goods Sold.
D)A credit of £100 to the Manufacturing Overhead Account.

Question

Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 70% of direct Labour cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company:
-The entry to dispose of the under- or overapplied overhead cost for the month would include:

A)a credit of £100 to Cost of Goods Sold. 
B)a credit of £6,000 to Manufacturing Overhead. 
C)a debit of £6,000 to Cost of Goods Sold. 
D)A credit of £100 to the Manufacturing Overhead Account.

Quizplus · Accepted Answer

The Answer of Loraine Company applies manufacturing overhead to jobs using a predetermined overhead rate of 70% of direct Labour cost. Any under- or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During August, the following transactions were recorded by the company:
-The entry to dispose of the under- or overapplied overhead cost for the month would include:

A)a credit of £100 to Cost of Goods Sold. 
B)a credit of £6,000 to Manufacturing Overhead. 
C)a debit of £6,000 to Cost of Goods Sold. 
D)A credit of £100 to the Manufacturing Overhead Account.

Loraine Company Applies Manufacturing Overhead to Jobs Using a Predetermined