Cost of sales needs to be debited at year-end when the manufacturing overhead is overallocated in order to clear the overhead account to zero.

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Quizplus · Accepted Answer

When manufacturing overhead is overallocated, it means that more overhead was applied to products than was actually incurred. To clear the overhead account to zero, the cost of sales should be credited, not debited, to reduce the overapplied overhead.

Cost of Sales Needs to Be Debited at Year-End When