Using the Following Information Assuming Underapplied Overhead Is Considered Material, Using the Preferred Method

question 16

Multiple Choice

Using the following information: $$\begin{array} { | l | l | } \hline \text { Cost of Goods Sold for the year } & \$ 840,000 \\\hline \text { Ending Finished Goods } & \$ 100,000 \\\hline \text { Ending Work in Process } & \$ 60,000 \\\hline \text { Underapplied manufacturing overhead } & \$ 40,000 \\\hline\end{array}$$ Assuming underapplied overhead is considered material, using the preferred method, what would be the adjustment to Cost of Goods Sold to close the underapplied overhead?

• A)A credit of $33,600.
• B)A debit of $40,000.
• C)A credit of $40,000.
• D)A debit of $33,600.

---

Definitions:

ROI

Return on Investment, a financial metric used to measure the efficiency and profitability of an investment.

Demographic Segmentation

The segmentation of a market into different groups according to factors like age, gender, income, occupation, and education levels.

Consumer Markets

Markets comprised of individuals and households that purchase goods and services for personal use.

Future Profit

The expected earnings or economic benefits that a company or investment will generate in future periods.