Daniel Company uses a job cost system.The overhead account shows a $4,500 overallocated balance at the end of the year.Actual overhead incurred was $95,000.Other balances are: Ending raw materials $ 10,000
Work in process inventory at end of year 30,000
Finished goods inventory at end of year 45,000
Cost of goods sold for year $275,000
The entry to close manufacturing overhead would include a:

Question

Quizplus · Accepted Answer

The overallocated overhead means that the applied overhead was more than the actual overhead incurred. To close the manufacturing overhead account, you need to debit it to bring the balance to zero.

Daniel Company Uses a Job Cost System