Seuell Inc

question 37

Multiple Choice

Seuell Inc.has provided the following data for the month of December.There were no beginning inventories; consequently,the direct materials,direct labor,and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $12,000.
The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process,finished goods,and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for December would include the following:

• A) debit to Finished Goods of $56,160
• B) credit to Finished Goods of $56,160
• C) debit to Finished Goods of $2,520
• D) credit to Finished Goods of $2,520

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Definitions:

Accrued Selling Expenses

Expenses that have been incurred but not yet paid in the selling process, recorded on the balance sheet.

Accrued Income Taxes

Taxes that have been incurred, but not yet paid, usually recognized at the end of an accounting period.

Operating Activity

Activities that are part of the day-to-day operations of a business, such as selling, general, and administrative expenses.

Treasury Stock

Shares that were issued and later reacquired by the issuing company.