Account Balances Are as Follows If Underapplied or Overapplied Overhead Is Material and Is Allocated

question 22

Multiple Choice

Account balances are as follows: $\begin{array}{lc}\text { Manufacturing overhead } & \$ 240,000 \text { underapplied } \\\text { Work in process } & 100,000 \\\text { Finished goods } & 300,000 \\\text { Cost of goods sold } & 800,000\end{array}$
If underapplied or overapplied overhead is material and is allocated to work in process,finished goods,and cost of goods sold (based on ending account balances) ,what would be the balance of cost of goods sold after adjustment?

• A)$640,000
• B)$960,000
• C)$1,040,000
• D)$1,440,000

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