The overhead variance for the current period is $40,000 underapplied, and the amount is material. Materials inventory $20,000 Work-in-process inventory $30,000 Finished goods inventory. $20,000 Cost of goods sold $50,000 The entry to adjust for the overhead variance would include. Is it a credit to work-in-process inventory for $10,000 or $12,000?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 15E: Factory overhead cost variances The following data relate to factory overhead cost for the...
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The overhead variance for the current period is $40,000 underapplied, and the amount is material.

Materials inventory                $20,000

Work-in-process inventory    $30,000

Finished goods inventory.      $20,000

Cost of goods sold                  $50,000

The entry to adjust for the overhead variance would include. 

Is it a credit to work-in-process inventory for $10,000 or $12,000?  Thanks!

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