3. The underapplied overhead will have to be allocated to the other ac-
counts on the basis of the overhead applied during the year in the end-
ing balance of each account:
Work in Process ... $ 19,500 5 %
Finished Goods... 58,500 15
Cost of Goods Sold ... 312,000 80
Total cost ... $390,000 100 %
Using these percentages, the entry would be as follows:
Work in Process (5% × $70,000) ... 3,500
Finished Goods (15% × $70,000)... 10,500
Cost of Goods Sold (80% × $70,000) ... 56,000
Manufacturing Overhead ... 70,000
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