Manufacturing
Closing Under-applied Overhead
Adjusting Cost of Goods Sold when actual factory overhead was higher than the amount 'applied' to products.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cost of Goods Sold | Expense (+) | 1,200.00 | - |
| Manufacturing Overhead (Control) | Clearing Account | - | 1,200.00 |
💡 Accountant's Note
At year-end, if your factory cost more to run than you estimated (under-applied), you must 'charge' that extra cost to COGS to balance the books.
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