Harna, Inc.uses a job order cost system.During the year the company decreased Manufacturing Overhead by $300,000.Which of the following most likely should be recorded at the same time?

Question

Quizplus · Accepted Answer

Since the company decreased Manufacturing Overhead, it means that there was an over-application of overhead during the year. This over-application should be allocated back to the jobs that incurred the overhead costs. Therefore, a debit to Work in Process Inventory (the account that tracks the cost of goods still in production) is the most likely choice.