Answer (D) is correct.
Overapplied or underapplied overhead should be disposed of at the end
of an accounting period by transferring the balance either to cost of
goods sold (if the amount is not material) or to cost of goods sold,
finished goods inventory, and work-in-process inventory. Theoretically,
the allocation is preferred, but, because the amount is usually immaterial,
the entire balance is often transferred directly to cost of goods sold. Thus,
the entry depends upon the significance of the amount.