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

Quizplus · Accepted Answer

When a company incurs more manufacturing overhead than applied, it has underapplied overhead. If the amount is not material, the difference is typically closed to Cost of Goods Sold by debiting Cost of Goods Sold and crediting Manufacturing Overhead.

A Company Incurred More Manufacturing Overhead Than the Amount It