Chapter 2, Learning Objective 5 Distinguish between under-...

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Chapter 2, Learning Objective 5. Distinguish between under- and overapplied manufacturing overhead.
Companies prepare the cost of goods manufactured schedule directly from the Work in Process Inventory account. Illustration 2-17 shows a condensed schedule for Wallace Company for January. Note that the cost of goods manufactured ($39,000) agrees with the amount transferred from Work in Process Inventory to Finished Goods Inventory in journal entry No. 7 in Illustration 2-15. The income statement and balance sheet are the same as those illustrated in Chapter 1. For example, Illustration 2-18 shows the partial income statement for Wallace for the month of January.

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