Goodman Company Has $30,000 in Underapplied Overhead, Which Is Considered

question 36

Multiple Choice

Goodman Company has $30,000 in underapplied overhead, which is considered by the company to be a material amount. Other account balances include:

Work in Process Inventory $140,000
Finished Goods Inventory 40,000
Cost of Goods Sold 20,000
Which one of the following would be the correct journal entry for closing the underapplied overhead?

• A)Work in Process Inventory 21,000
• Finished Goods Inventory 6,000
• Cost of Goods Sold 3,000
• Manufacturing Overhead 30,000
• B)Manufacturing Overhead 30,000
• Work in Process Inventory 21,000
• Finished Goods Inventory 6,000
• Cost of Goods Sold 3,000
• C)Manufacturing Overhead 30,000
• Work in Process Inventory 10,000
• Finished Goods Inventory 10,000
• Cost of Goods Sold 10,000
• D)Work in Process Inventory 10,000
• Finished Goods Inventory 10,000
• Cost of Goods Sold 10,000
• Manufacturing Overhead 30,000
• E)None of the answer choices is correct

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Definitions:

The Calorie

A unit of energy defined as the amount of heat needed to raise the temperature of one kilogram of water by one degree Celsius.

Kinetic Energy

The energy that an object possesses because of its motion, calculated by the equation 1/2 mv^2 where m is mass and v is velocity.

Temperature

A measure of the average kinetic energy of the particles in a substance, influencing its thermal state or phase.

Fire Triangle

A model explaining the three elements needed for fire: heat, fuel, and an oxidizing agent.