In a job-order system,the actual factory overhead costs incurred are $150,000.Applied factory overhead costs are $160,000.What entry is needed to dispose of the overhead variance? Use the immediate write-off method.
A) Debit Factory Department Overhead Control, Credit Factory Department Overhead Applied
B) Debit Factory Department Overhead Applied, Credit Cost of Goods Sold
C) Debit Factory Department Overhead Applied, Credit Finished Goods Inventory
D) Debit Factory Department Overhead Control, Credit Cost of Goods Sold

Question

Quizplus · Accepted Answer

The immediate write-off method involves disposing of any overhead variance directly to cost of goods sold. Therefore, we would debit the Factory Department Overhead Control account (which has a credit balance of $10,000, representing the overhead variance) and credit Cost of Goods Sold. Option D is the only choice that includes this entry.

In a Job-Order System,the Actual Factory Overhead Costs Incurred Are