Using the Following Information Assuming Overapplied Overhead Is Considered Material, Using the Preferred Method

Using the following information: $$\begin{array} { | l | l | } \hline \text { Cost of Goods Sold for the year } & \$ 840,000 \\\hline \text { Ending Finished Goods } & \$ 100,000 \\\hline \text { Ending Work in Process } & \$ 60,000 \\\hline \text { Overapplied manufacturing overhead } & \$ 40,000 \\\hline\end{array}$$ Assuming overapplied overhead is considered material, using the preferred method, what would be the adjustment to Cost of Goods Sold to close the overapplied overhead?

A) A credit of $33,600.
B) A debit of $40,000.
C) A credit of $40,000.
D) A debit of $33,600.

Correct Answer:

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