The actual manufacturing overhead incurred at Hogans Corporation during April was $59,000,while the manufacturing overhead applied to Work in Process was $74,000.The company's Cost of Goods Sold was $289,000 prior to closing out its Manufacturing Overhead account.The company closes out its Manufacturing Overhead account to Cost of Goods Sold.Which of the following statements is true?

Question

Quizplus · Accepted Answer

Manufacturing overhead was overapplied by $15,000 because the applied overhead ($74,000) was greater than the actual overhead ($59,000). To close out the overapplied overhead, Cost of Goods Sold is reduced by $15,000, resulting in a new Cost of Goods Sold of $274,000.

The Actual Manufacturing Overhead Incurred at Hogans Corporation During April