Assuming that the actual overhead costs of the three pools totalled $746,000 and actual activity was equal to expected activity,what would be the required entry to the Cost of Goods Sold account?

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Quizplus · Accepted Answer

Since the actual overhead costs are higher than the allocated overhead costs, indicating over-applied overhead, we need to debit the Cost of Goods Sold account to decrease it. The amount of over-applied overhead is the difference between the actual overhead costs and allocated overhead costs ($746,000 - $745,200 = $800). Therefore, the required entry to the Cost of Goods Sold account would be a debit of $800.

Assuming That the Actual Overhead Costs of the Three Pools