Which would be the adjustment to cost of goods sold account

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Reference no: EM132733622

The following information relates to Burgundy for July 2020:

Actual direct labour costs $50,000

Actual direct labour rate per hour $10

Factory overhead rate per direct labour hour $15

Factory overhead incurred $80,000

As part of the cost planning and cost control of operations and activities, management is concerned regarding the applied overhead rate used.

Required

Problem a) Identify whether there is an underapplied or overapplied overhead. Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period, which would be the adjustment to the cost of goods sold account?

Reference no: EM132733622

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