A company estimated annual manufacturing overhead of $900,000 and 50,000 machine hours.
Actual results were:
Machine hours: 48,000
Indirect materials: $120,000
Indirect labour: $210,000
Factory depreciation: $280,000
Factory utilities: $190,000
Factory insurance: $75,000
Which statement is correct?

Question

A company estimated annual manufacturing overhead of $900,000 and 50,000 machine hours.

Actual results were:

Which statement is correct?

Accepted Answer

OH is $11,000 underapplied; Dr COGS $11,000, Cr MOH $11,000.

Answer

OH is $36,000 overapplied; Dr MOH $36,000, Cr COGS $36,000.

Answer

OH is $25,000 underapplied; Dr COGS $25,000, Cr MOH $25,000.

Answer

OH is $11,000 overapplied; Dr MOH $11,000, Cr COGS $11,000.

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