Applied factory overhead was $2,100 and actual factory overhead turns out to be $2,050. What happens to Cost of Goods Sold?

1. Applied overhead of $2,100 is compared with actual overhead of $2,050. 2. Applied exceeds actual by $50, so overhead was over applied by $50. 3. Too much was moved out of the Factory Overhead account, so $50 must be put back by debiting it. 4. The matching credit reduces Cost of Goods Sold by $50. 5. The original credit of $2,100 minus this debit of $50 equals the actual $2,050. 6. Debiting Cost of Goods Sold is the under applied treatment and would push the error the wrong way. 7. Leaving the accounts unchanged would report jobs at an estimate the company knows to be wrong. _Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 2.2 Comprehensive Example of Job Order Costing Transactions for a Manufacturing Company_