Beta Company determined that its manufacturing overhead for the current accounting period was overapplied by $1,400. It closed the amount to cost of goods sold. The recognition of this transaction will:
A)Decrease cost of goods sold.
B)Increase cost of goods sold.
C)Have no impact on cost of goods sold.
D)None of these.

Question

Quizplus · Accepted Answer

When manufacturing overhead is overapplied, it means that the overhead allocated to products was more than the actual overhead incurred. Closing this overapplied amount to cost of goods sold will decrease the cost of goods sold.

Beta Company Determined That Its Manufacturing Overhead for the Current