Gough's Manufacturing had underapplied overhead totaling $5,000 during the period.To dispose of this underapplied overhead, Gough should

Question

Quizplus · Accepted Answer

To dispose of underapplied overhead, companies usually increase the Cost of Goods Sold account, which decreases the net income by the amount of underapplied overhead. Therefore, the correct choice is to increase the Cost of Goods Sold account by $5,000.

Gough's Manufacturing Had Underapplied Overhead Totaling $5,000 During the Period