Question

Refer to the T-account below:

Manufacturing Overhead
(2) 9,000 (12) 167,000
(3) 15,000
(4) 80,000
(5) 30,000
(6) 25,000
159,000 167,000
Bal. 8,000

The ending balance of $8,000 represents which of the following?

A. A bookkeeping error.B. Manufacturing overhead that will be carried over to the next period.C. Underapplied overhead.D. Overapplied overhead

Answer 1

D. Overapplied overhead

Step-by-step explanation:

The debit side represent the actual overhead cost incurred by the company over the time period

While the credit input represetn the appplied overhead based on teh cost driver and predeterminated overhead rate.

The difference which arises represent the underapplied or overapplied overhead

As the applied overhead exceed the actual overhead (CREDIT > DEBIT) it was overapplied

The company will reduce it against COGS or Proportionally against COGS, WIP inventory and Finished Goods