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

question 154

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 Manufacturing Overhead was $12,000 overapplied and considered immaterial,what is the journal entry?

• A)\(\begin{array}{lr}
• \text { Cost of Goods Sold}&\$12,000\\
• \text {Manufacturing Overhead }&&\$12,000\\
• \end{array}\)
• B)\[\begin{array} { c c }
• \text { Manufacturing Overhead }& \$ 12,000 \\
• \text { Cost of Goods Sold }&&\$ 12,000
• \\
• \end{array}\]
• C)\[\begin{array} { l l l }
• \text { Manufacturing Overhead } & \$ 12,000 & \\
• \text { Raw Materials } & & \$ 2,000 \\
• \text { Work in Process } && \$ 4,000 \\
• \text { Finished Goods } & &\$ 1,000 \\
• \text { Cost of Goods Sold } && \$ 5,000
• \end{array}\]
• D)\[\begin{array} { c c c }
• \text { Manufacturing Overhead } & \$ 12,000 & \\
• \text { Work in Process } & & \$ 4,800 \\
• \text { Finished Goods } && \$ 1,200 \\
• \text { Cost of Goods Sold } && \$ 6,000
• \end{array}\]

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Definitions:

Cosureties

Joint parties who guarantee to pay back a loan or satisfy a debt for someone else if that person fails to do so.

Right of Reimbursement

The right to be repaid or compensated for expenses, losses, or damages that have been paid out or incurred on behalf of another party or entity.

Cosigns

Occurs when an individual signs a contract or loan agreement alongside another, taking on equal responsibility for the obligation.

Artisans' Liens

A possessory lien that allows craftsmen or service providers to retain possession of an item they have serviced or improved until they are paid.