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Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400, and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include A. a debit to Cost of Goods Sold for $600. B. a credit to Factory Overhead for $600. C. a credit to Finished Good Inventory for $600. D. a debit to Work in Process Inventory for $600. E. a credit to Cost of Goods Sold for $600.

Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400, and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include A. a debit to Cost of Goods Sold for $600. B. a credit to Factory Overhead for $600. C. a credit to Finished Good Inventory for $600. D. a debit to Work in Process Inventory for $600. E. a credit to Cost of Goods Sold for $600.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 8PA: Coops Stoops estimated its annual overhead to be $85,000 and based its predetermined overhead rate...
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Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400, and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include A. a debit to Cost of Goods Sold for $600. B. a credit to Factory Overhead for $600. C. a credit to Finished Good Inventory for $600. D. a debit to Work in Process Inventory for $600. E. a credit to Cost of Goods Sold for $600.
Transcribed Image Text:Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400, and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include A. a debit to Cost of Goods Sold for $600. B. a credit to Factory Overhead for $600. C. a credit to Finished Good Inventory for $600. D. a debit to Work in Process Inventory for $600. E. a credit to Cost of Goods Sold for $600.
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