The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for July would include the following:
A)debit to Finished Goods of $29,800
B)credit to Finished Goods of $600
C)debit to Finished Goods of $600
D)credit to Finished Goods of $29,800

Question

Quizplus · Accepted Answer

If overhead is overapplied, it means that the amount of overhead applied to production is greater than the actual amount incurred. Alternatively, if overhead is underapplied, it means the amount of overhead applied to production is less than the actual amount incurred. In either scenario, the balance in the manufacturing overhead account must be adjusted and allocated to the appropriate accounts, including Finished Goods.

Since the question states that there is either underapplied or overapplied overhead, we know that one of these adjustment entries must be made. Assuming that the amount of underapplied or overapplied overhead is $600, the entry would be a debit to Finished Goods for $600. Therefore the correct answer is C.

The Journal Entry to Record the Allocation of Any Underapplied