Underapplied manufacturing overhead increases the balance in cost of goods sold, resulting in a debit entry.
-The balance on March 1 in the Raw Materials inventory account was:

Question

Underapplied manufacturing overhead increases the balance in cost of goods sold, resulting in a debit entry. 
-The balance on March 1 in the Raw Materials inventory account was:

Quizplus · Accepted Answer

Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory = Raw materials used in production
Beginning raw materials inventory + $27,000 - $7,500 = $28,000
Beginning raw materials inventory = $28,000 - $27,000 + $7,500 = $8,500

Underapplied Manufacturing Overhead Increases the Balance in Cost of Goods