Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the
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Question:
Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $115,500 and $125,300, respectively. During the year, the actual overhead was $107,700 and the actual direct labor cost was $118,000. The entry to close the over-or underapplied overhead at year-end, assuming an immaterial amount, would include (Round predetermined overhead rate to nearest whole percentage.):
A credit to Factory Overhead for $860.
A credit to Cost of Goods Sold for $860.
A credit to Finished Goods Inventory for $860.
A debit to Cost of Goods Sold for $860.
A debit to Work in Process Inventory for $860.
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