ABC uses job costing. Actual manufacturing overhead for the period is $19,600 while allocated manufacturing overhead is $18,700. What entry will close the manufacturing overhead balance?

Question

Quizplus · Accepted Answer

The correct entry to close the manufacturing overhead balance when actual overhead ($19,600) is more than the allocated overhead ($18,700) is to debit Cost of Goods Sold and credit Manufacturing Overhead for the difference ($900). This adjusts the cost of goods sold for the under-applied overhead.

ABC Uses Job Costing