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25 December, 19:02

The following information is available for the current year ending December 31:

Manufacturing overhead applied $150,000

The actual amount of manufacturing overhead costs 120,000 Knowledge Check 01

What is the balance of the Manufacturing Overhead account and is overhead underapplied or overapplied at the end of the year?

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  1. 25 December, 21:53
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    Over/under allocation = $30,000 overapplied

    Explanation:

    Giving the following information:

    Manufacturing overhead applied $150,000

    The actual amount of manufacturing overhead costs 120,000

    To calculate the ending balance, we need to determine whether the overhead was under or over applied:

    Over/under allocation = real MOH - allocated MOH

    Over/under allocation = 120,000 - 150,000 = 30,000 overapplied
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