Question

Castagnola Inc. has provided the following data for the month of January. There were no beginning inventories, consequently, th direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Direct materials Direct labor Manufacturing overhead applied Total Work In Process $ 880 4,100 2,460 $7,440 Cost of Goods Finished Goods Sold $ 5,500 $ 23,100 17,600 73,920 7,380 31,160 $30,480 $128, 180 Total $ 29,480 95,620 41,000 $166,100 Manufacturing overhead for the month was overapplied by $1,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and ca of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include following:

Answer 1

The journal entry for overapplied overhead is:
	Debit	Credit
Manufacturing overhead	1000
Work in process		60	=1000*2460/41000
Finished goods		180	=1000*7380/41000
Cost of goods sold		760	=1000*31160/41000
Option C credit to Cost of Goods Sold of $760 is correct option