At the end of 2017, Harbin Toys had the following balances in its accounts $\begin{array}{lr}
\text { Raw Materials Inventory } & \$ 12,000 \
\text { Work in Process Inventory } & 30,000 \
\text { Finished Goods Inventory } & 48,000 \
\text { Cost of Goods Sold } & 360,000 \
\text { Manufacturing Overhead (credit) } & 3,200
\end{array}$ Assuming the amount in Manufacturing Overhead is considered immaterial, which of the following accounts will be credited for $3,200 in eliminating the balance in the Manufacturing Overhead account?

Question

Quizplus · Accepted Answer

The $3,200 credit balance in Manufacturing Overhead is typically closed out to the Cost of Goods Sold (COGS) account, as it represents an over-applied overhead cost for the period. This adjustment decreases the COGS, reflecting that the actual overhead costs were less than what was initially applied or allocated.

At the End of 2017, Harbin Toys Had the Following