Refer to the information in Exercise 2-13.
Indirect materials..............................$ 40,000
Indirect labor.....................................80,000
Utilities............................................25,000
Depreciation.....................................60,000
Repair expense..................................55,000
Total...........................................$260,000
Required
a. Determine the balance in manufacturing overhead, and prepare a journal entry to close the balance to cost of goods sold.
b. Why is it important to close the balance in manufacturing overhead?
c. Assume that Star Plastics uses a JIT inventory system. What is the justification for assigning the balance in manufacturing overhead to Cost of Goods Sold rather than apportioning it to Work in Process, Finished Goods, and Cost of Goods Sold?