Question

the correct journal entry to dispose off an underapplied manufacturing overhead balance to cost of goods sold account is:
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Answer 1

Answer:

manufacturing overhead and make journal entries required to dispose off over or under applied manufacturing overhead assuming:

It is disposed off by allocating between inventory and cost of goods sold accounts.

It is disposed off by transferring to cost of goods sold.

Answer 2

Answer:

Overapplied = Reduces COGS

Underapplied = Addition to COGS

(It can also be disposed by allocating it among the finished goods and work in process account)

Explanation:

Underapplied:

COGS                           0000

    Manufacturing Overhead     0000

or

COGS                        0000

Work in Process      0000

Final Goods             0000

    Manufacturing Overhead         0000