Sting Corporation debited Cost of Goods Sold and credited Manufacturing Overhead at year-end.On the basis of this information,one can conclude that:

Question

Quizplus · Accepted Answer

When the Cost of Goods Sold is debited and Manufacturing Overhead is credited, it means that the actual overhead expenses were lower than the applied overhead expenses. This can be seen from the fact that the overhead expenses applied during the year have been recorded in the Manufacturing Overhead account, which is now being credited. However, the actual expenses incurred during the year are lower than the applied expenses, which results in a debit to the Cost of Goods Sold account to adjust for the difference. Therefore, the correct choice is D, which states that actual overhead exceeded applied overhead.

Sting Corporation Debited Cost of Goods Sold and Credited Manufacturing