Malcolm Company produces two products: products A and B. To assign manufacturing overhead to the two products, the compa

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Malcolm Company produces two products: products A and B. To
assign manufacturing overhead to the two products, the company uses
one single predetermined overhead rate for both products, and uses
machine hours as the allocation base. The following data are given
for the year 2021:
At the end of each year, the company makes adjustment entries to
close out under- and over-applied manufacturing overhead to Cost of
Goods Sold. What is the journal entry to dispose of the
under-/over-applied manufacturing overhead to Cost of Goods Sold at
the end of 2021?
DR Manufacturing Overhead $80,000
CR Cost of Goods
Sold
$80,000
DR Cost of Goods Sold $56,000
CR Manufacturing
Overhead
$56,000
DR Cost of Goods
Sold
$80,000
CR Manufacturing
Overhead $80,000
DR Manufacturing Overhead $56,000
CR Cost of Goods
Sold
$56,000