If overhead applied for the month totals $980,000 and actual overhead incurred for the month is $970,000 then a _____ would be made to COGS in the amount of ______.
a. debit; $10,000
b. debit; $0, since it will be capitalized because the amount is material and should be charged to components of inventory and COGS
Selected: c. credit; $10,000This answer is correct.
d. none of the above.
Correct! If actual overhead incurred is less than the overhead applied, then the difference is written off the COGS as a credit, reducing actual overhead in COGS incurred for the month