Alvernaz Inc. has provided the following data for the month of April. There were no beginning inventories; consequently the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month :

Direct Materials.... Work In Process : $7,440 Finished Goods : $13,300 Cost of Goods Sold : $35,150 Total : $55,890

Direct Labor ... Work In Process : $7,560 Finished Goods : $18,200 Cost of Goods Sold : $48,100 Total : $73,860

Manufacturing Overhead Applied ... Work In Process : $5,700 Finished Goods : $8,740 Cost of Goods Sold : $23,560 Total : $38,000

Total Work In Process : $20,700 Total Finished Goods : $40,240 Total Cost of Goods Sold : $106,810 Total Work In Process, Finished Goods, Cost of Goods Sold : $167,750

The actual manufacturing overhead for the month totaled $36,000. The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied overhead for April would include the following :

A) credit to cost of goods sold of $1,240

B) credit to cost of goods sold of $106,810

C) debit to cost of goods sold of $106,810

D) debit to cost of goods sold of $1,240

I NEED HELP WITH STEPS AND WHY IT IS A DEBIT/CREDIT :)