ECONOMICS

Detailed explanation-1: -Answer: To allocate manufacturing overhead, Work-in-Process Inventory is debited and Manufacturing Overhead is credited. Work-in-Process Inventory is treated as an current asset, and increase the assets of the company and Manufacturing Overhead is decreased, which increases equity of the company.

Detailed explanation-2: -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.

Detailed explanation-3: -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-4: -When overhead has been overapplied, the proper accounting is to debit the manufacturing overhead cost pool and credit the cost of goods sold in the amount of the overapplication. Doing so results in the actual amount of overhead incurred being charged through the cost of goods sold.