ECONOMICS

Detailed explanation-1: -Answer and Explanation: The correct answer is option b. charged or credited to Cost of Goods Sold. The underapplied and overapplied manufacturing overhead at year-end is most commonly charged or credited to Cost of Goods Sold.

Detailed explanation-2: -If manufacturing overhead has a debit balance, the overhead is underapplied, and the resulting amount in cost of goods sold is understated. The adjusting entry is: If manufacturing overhead has a credit balance, the overhead is overapplied, and the resulting amount in cost of goods sold is overstated.

Detailed explanation-3: -The statement is TRUE. The balance of the manufacturing overhead control account must be closed at the end of the year, and this is usually done by debiting or crediting the Cost of Goods Sold expense.

Detailed explanation-4: -If manufacturing overhead has a debit balance, the overhead is underapplied, and the resulting amount in cost of goods sold is understated. The adjusting entry is: If manufacturing overhead has a credit balance, the overhead is overapplied, and the resulting amount in cost of goods sold is overstated.

Detailed explanation-5: -Manufacturing Overhead Account The overhead account is debited for the actual overhead costs as incurred. The overhead account is credited for the overhead costs applied to production in the work-in-process account.