The Dina Corp. has applied overhead to jobs during the period as follows: The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:

Question

The Dina Corp. has applied overhead to jobs during the period as follows:  The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:

Quizplus · Accepted Answer

In order to dispose of the remaining factory overhead balance, we need to transfer it out of the Factory Overhead account and into the Cost of Goods Sold account. Therefore, we need to debit Factory Overhead for $5,600 and credit Cost of Goods Sold for the same amount. Option B is the correct answer as it represents these actions. Option A is incorrect as it credits Factory Overhead instead of debiting it, and Option C and D involve Goods in Process Inventory which is not relevant in this scenario. Option E is incorrect as an entry is needed to dispose of the remaining balance.