Estimated Overhead and Direct Labor Costs for the Year Were

question 143

Multiple Choice

Estimated overhead and direct labor costs for the year were $250,000 and $125,000, respectively. During the year, actual overhead was $248,000 and actual direct labor cost was $123,000. The entry to close the over- or under-applied overhead at year-end, assuming an immaterial amount, would include:

• A) A debit to Cost of Goods Sold for $2,000.
• B) A debit to Factory Overhead for $2,000.
• C) A credit to Finished Goods Inventory for $2,000.
• D) A debit to Goods in Process Inventory for $2,000.
• E) A credit to Cost of Goods Sold for $2,000.

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Definitions:

Cost

The amount of money required to purchase something or the expense associated with producing a service or carrying out a project.

Business Strategies

Comprehensive plans crafted by organizations to achieve competitive advantage, meet customer needs, and ensure long-term profitability and growth.

Horizontal Fit

involves the alignment of HR practices with each other to ensure they are coherent and mutually supportive in achieving organizational goals.

Organization's Mission

The core purpose and objectives of an organization, which guides its actions and strategic decisions.