Biology Forums - Study Force

Seuell Incorporated has provided the following data for the month of December. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

	Work In Process	Finished Goods	Cost of Goods Sold	Total
Direct materials	$ 4,080	$18,630	$ 66,240	$ 88,950
Direct labor	5,380	24,300	86,400	116,080
Manufacturing overhead applied	3,780	13,230	45,990	63,000
Total	$13,240	$56,160	$198,630	$268,030

Manufacturing overhead for the month was overapplied by $12,000.

The Corporation 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 manufacturing overhead applied during the month in those accounts.

The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for December would include the following:

▸ debit to Finished Goods of $56,160

▸ credit to Finished Goods of $56,160

▸ debit to Finished Goods of $2,520

▸ credit to Finished Goods of $2,520

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