The Sterling Company applies manufacturing overhead. At the end of the year the following data were available: Actual Manufacturing Overhead $115,000 Estimated Manufacturing Overhead $110,000 Applied Manufacturing Overhead $100,000 The following accounts had the unadjusted balances: Raw Materials Inventory $100,000 Work-in-Process Inventory $100,000 Finished Goods Inventory $100,000 Cost of Goods Sold $300,000 What is the journal entry if the amount is considered material?

Work-in-process: $3,000

Finished Goods: $3,000

Cost of Goods Sold: $9,000

Manufacturing Overhead: $15,000

Explanation:

Under applied Manufacturing Overheads = Actual Manufacturing Overheads - Applied Manufacturing Overheads

= $115,000 - $100,000

= $15,000

This Under applied overheads will be allocated in proportion to un-adjusted balances of Work In Process ; Finished Goods; Cost of Goods Sold

The proportion will be $100,000:$100,000:$300,000 = 1:1:3

Therefore,

Amount Applied to Work In Process Inventory = $3,000

Amount Applied to Finished Goods Inventory = $3,000

Amount Applied to Cost of Goods Sold = $9,000

Total = 3,000 + 3,000 + 9,000 = $15,000

answer/// there is an inverse relationship between price and quantity demanded;