The Ogunquit Company Uses a Predetermined Overhead Rate -Refer to the Figure

question 78

Multiple Choice

The Ogunquit Company uses a predetermined overhead rate. The following accounts have these unadjusted balances:
$\begin{array}{ll}\text { Raw Materials } & \$ 20,000 \\\text { Work in Process } & \$ 40,000 \\\text { Finished Goods } & \$ 10,000 \\\text { Cost of Goods Sold } & \$ 50,000\end{array}$
-Refer to the figure.If Overhead is underapplied by $12,000 and considered immaterial,what would be the journal entry?

• A)Cost of Goods Sold \(\quad\quad\$ 12,000 \)
• Manufacturing Overhead \( \quad\quad\quad\quad\quad\$ 12,000 \)
• B)\[\begin{array} { l }
• \text { Manufacturing Overhead } &\$ 12,000 \\
• \text { Cost of Goods Sold } && \$ 12,000
• \end{array}\]
• C)\(\begin{array}{l}
• \begin{array}{ll}
• \text { Raw Materials } & \$ 2,000 \\
• \text { Work in Process } & \$ 4,000 \\
• \text { Finished Goods } & \$ 1,000 \\
• \text { Cost of Goods Sold } & \$ 5,000
• \end{array}\\
• \text { Manufacturing Overhead }& \$ 12,000
• \end{array}\)
• D)\[\begin{array} { l l l }
• \text { Manufacturing Overhead } & \$ 12,000 & \\
• \text { Raw Materials } & & \$ 2,000 \\
• \text { Work in Process } && \$ 4,000 \\
• \text { Finished Goods } & &\$ 1,000 \\
• \text { Cost of Goods Sold } && \$ 5,000
• \end{array}\]

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