Concept introduction:
Work in Progress inventory means the stock which is still in the process of production.
Finished Goods inventory means those goods on which the work of production is completed, and they are available for sale.
Cost of goods sold means calculate the amount of cost on that inventory which is sold in the market.
Manufacturing overhead are applied to the process of production on the basis of various methods, but the actual manufacturing overhead are different from the applied manufacturing overhead. So, the difference between actual and applied is transferred to the cost of goods sold account.
Requirement-1:
To prepare:
Necessary
Concept introduction:
Work in Progress inventory means the stock which is still in the process of production the work on these goods still not completed.
Finished Goods inventory means those goods on which the work of production is completed and they are available for sale.
Cost of goods sold means calculate the amount of cost on that inventory which is sold in the market.
Manufacturing overhead are applied to the process of production on the basis of various methods but the actual manufacturing overhead are different from the applied manufacturing overhead. So the difference between actual and applied is transferred to the cost of goods sold account.
Requirement-2:
To prepare:
Pass journal of transfer of overhead balance to cost of goods sold account.
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EBK MANAGERIAL ACCOUNTING
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