Respuesta :
Manufacturing overhead is underapplied and the resulting cost of products sold is overstated if there is a debit balance. If manufacturing overhead has a credit balance, the overhead is overapplied and the resulting cost of products sold amount is overstated, according to the adjusting entry.
On a company's balance sheet, unapplied overhead is often shown as a deferred item that is balanced by adding a debit to the cost of goods sold (COGS) section before the end of the year.
You must first determine the overhead allocation rate before you can allocate the overhead charges. To achieve this, divide the total overhead by the number of hours of direct work. This indicates that you must budget $3.33 in overhead for every hour that it takes to produce a product.
The correct accounting procedure is to debit the manufacturing overhead cost pool and credit the cost of products sold in the amount of the overapplication where overhead has been applied incorrectly. This has the effect of charging the true amount of overhead through the cost of products sold.
Learn more about overhead visit:https://brainly.com/question/19130334
#SPJ4
