At the end of the period, Massive Designs had the following debit balances in its accounts. $$\begin{array} { l r }
\text { Raw Materials Inventory } & \$ 20,000 \
\text { Work in Process Inventory } & 40,000 \
\text { Finished Goods Inventory } & 60,000 \
\text { Cost of Goods Sold } & 400,000 \
\text { Manufacturing Overhead } & 8,000
\end{array}$$ Assuming the amount in Manufacturing Overhead is considered material, the entry to allocate Manufacturing Overhead will include a

Question

At the end of the period, Massive Designs had the following debit balances in its accounts. $$\begin{array} { l r } 
\text { Raw Materials Inventory } & \$ 20,000 \
\text { Work in Process Inventory } & 40,000 \
\text { Finished Goods Inventory } & 60,000 \
\text { Cost of Goods Sold } & 400,000 \
\text { Manufacturing Overhead } & 8,000
\end{array}$$ Assuming the amount in Manufacturing Overhead is considered material, the entry to allocate Manufacturing Overhead will include a

Quizplus · Accepted Answer

Manufacturing Overhead is allocated to Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold based on the predetermined overhead rate. The amount allocated to Cost of Goods Sold is $8,000 - $20,000 * 8,000 / (20,000 + 40,000 + 60,000) = $6,400.

At the End of the Period, Massive Designs Had the Following