Cost of goods sold, This question belongs to Accounting and

Cost of goods sold

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Question-

During the year, XYZ allocated $435,000 of manufacturing overhead cost into the production process. XYZ incurred actual manufacturing overhead costs during the year of $425,000. Relevant ending balances before adjusting for any over/under-allocated manufacturing over head are:

Cost of Goods Sold (COGS) $680,000
WIP $40,000
Finished Goods $80,000

REQUIRED:

1. Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold.

2. Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances.

Additional information-

This question belongs to Accounting and it discuss about Preparing a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold.

Reference no: EM13824838

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