The Dina Corp.has applied overhead to jobs during the period as follows:
The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account,and this amount is not material.The entry to dispose of this remaining factory overhead balance is:

Question

The Dina Corp.has applied overhead to jobs during the period as follows:
 The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account,and this amount is not material.The entry to dispose of this remaining factory overhead balance is:

Quizplus · Accepted Answer

The remaining credit balance in the Factory Overhead account indicates that overhead was overapplied during the period. This means that the amount of overhead applied to jobs was more than the actual overhead incurred. To dispose of the remaining balance, the Factory Overhead account needs to be debited and the Cost of Goods Sold account needs to be credited for the same amount. This will decrease the amount of overhead applied and increase the cost of goods sold, resulting in a more accurate reflection of the actual cost of production. Therefore, option B is the correct entry.