The journal entry to write-off a significant underapplied overhead balance at the end of an accounting period is

Question

Quizplus · Accepted Answer

Choice C is the correct option because it follows the appropriate accounting treatment for an underapplied overhead balance at the end of an accounting period, which is to allocate the balance to Cost of Goods Sold. This is done by debiting Cost of Goods Sold for the underapplied amount and crediting the Manufacturing Overhead account to close it out for the period. Choice A is incorrect because debiting Manufacturing Overhead will increase the balance instead of reducing it. Choice B is incorrect because it does not address the underapplied overhead balance. Choice D is incorrect because it credits Cost of Goods Sold instead of debiting it, which would decrease the balance further.

The Journal Entry to Write-Off a Significant Underapplied Overhead Balance