Assume there is $2,000 of overapplied fixed overhead, which is to be prorated. Current balances of selected accounts are:

\begin{array} { l l } \text { Work in process } & \$ 15,000 \\\text { Finished goods } & 25,000 \\\text { Cost of goods sold } & 60,000\end{array}

The adjusting journal entry is: a) Overapplied fixed overhead

\quad

\quad

2,000

\begin{array}{lr}\text { Work in process } & 300 \\\text { Finished goods } & 500 \\\text { Cost of goods sold } & 1,200\end{array}

\begin{array}{lr}\text { b) Work in process } & 300 \\\text { Finished goods } & 500 \\\text { Cost of goods sold } & 1,200\\\text { Overapplied fixed overhead }&2,000\end{array}

\begin{array}{lr}\text { c) Fixed overhead control } & 2,000 \\\text { Work in process } & 300 \\\text { Finished goods } & 500 \\\text { Cost of goods sold } & 1,200\end{array}

\begin{array}{lr}\text { d) Work in process } & 300 \\\text { Finished goods } & 500 \\\text { Cost of goods sold } & 1,200\\\text { Fixed overhead allocated }&2,000\end{array}

Sludge, Inc

Multiple Choice