Overhead allocation process
Oldco has had some difficulty moving its inventory in 2010. The company’s accountants have reviewed Oldco’s overhead allocation process and has increased the factory overhead it allocates to inventory (as opposed to period costs).
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Assuming that any over- or underapplied overhead is not material, prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold at the end of year 2011.
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