Graeser Inc

question 36

Multiple Choice

Graeser Inc.has provided the following data for the month of May.There were no beginning inventories;consequently,the direct materials,direct labor,and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $4,000.

The company allocates any underapplied or overapplied manufacturing overhead among work in process,finished goods,and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for May would include the following:

• A)credit to Cost of Goods Sold of $100,110
• B)credit to Cost of Goods Sold of $2,520
• C)debit to Cost of Goods Sold of $2,520
• D)debit to Cost of Goods Sold of $100,110

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Definitions:

Pre-merger WACC

The Weighted Average Cost of Capital for a company before undergoing a merger, representing its cost of funds.

Capital Structure

Capital structure refers to the composition of a company's funding obtained through debt and equity, including bonds, loans, and stock.

Synergy

The concept that the combined value and performance of two companies will be greater than the sum of the separate individual parts.

Equity-financed

Equity-financed refers to funding a business or project through selling ownership interests (shares) in the company rather than borrowing through debt.