If Total Overapplied or Underapplied Overhead Is Closed to the Cost

question 5

Multiple Choice

If total overapplied or underapplied overhead is closed to the Cost of Goods Sold account at the end of each year,the entry to Cost of Goods Sold would have been:

• A) $33,000 credit.
• B) $33,000 debit.
• C) $66,000 credit.
• D) $66,000 debit.

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Definitions:

Profit

The income earned when the total revenue from business activities is higher than the combined expenses, costs, and taxes necessary for those activities.

Proportions

The relationship between parts and a whole in terms of size, quantity, or degree.

Factor 2

A component or element that contributes to a particular result or situation.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.