A company incurred more manufacturing overhead than the amount it applied to its jobs during the year.What entry must be made at the end of the year to allocate the remaining overhead if NOT material in amount?

Question

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When a company incurs more manufacturing overhead than it applies to jobs, the remaining overhead is typically allocated to the Cost of Goods Sold (COGS) if the amount is not material. This adjustment ensures that the financial statements accurately reflect the costs associated with production. The entry debits COGS, increasing the expense, and credits Manufacturing Overhead, clearing the remaining balance.

A Company Incurred More Manufacturing Overhead Than the Amount It