3.50 points TB MC Qu. 2-75 Manufacturing overhead was estimated to be... Manufac

Question

3.50 points TB MC Qu. 2-75 Manufacturing overhead was estimated to be... Manufacturing overhead was estimated to be $426,300 for the year along with 20,300 direct labor hours. Actual manufacturing overhead was $440,000, and actual labor hours were 21,500. To dispose of the balance in the Manufacturing Overhead account, which of the following would be correct? Cost of Goods Sold would be debited for $13,700 Cost of Goods Sold would be debited for $11,500 Cost of Goods Sold would be credited for $13,700 Cost of Goods Sold would be credited for $11,500o

Explanation / Answer

predetermine overhead rate = 426300/20300 = 21 per labour hour

Overhead applied = 21*21500 = 451500

Actual overhead = 440000

Over applied overhead = 451500-440000 = 11500

so entry should be manufacturing overhead debit and cost of goods sold credit by $11500

so answer is d) Cost of goods sold would be credited for $11500

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