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Bullz Company manufactures an energy drink. The company uses budgeted indirect-cost rate for its manufacturing operations and during 2014 allocated $1,000,000 to work-in-process inventory. Actual overhead incurred was $1,200,000. Ending balances in the following accounts are: Work in Process$ 100,000 Finished Goods 750,000 Cost of Goods Sold4,150,000 Required: a) Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold. Be sure your journal entry closes the related overhead accounts. b) Prepare a journal entry that prorates the write off of the difference between allocated and actual overhead using ending account balances. Be sure your journal entry closes the related overhead accounts.
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Bullz Company manufactures an energy drink. The company uses budgeted indirect-cost rate for its man...
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