Question

Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $456,000, and direct labor costs to be $2,280,000. Actual overhead costs for the year totaled $422,000, and actual direct labor costs totaled $1,940,000. At year-end, the balance in the Factory Overhead account is a:

Answer 1

The balance in Factory overhead $34,000 Dr

Working

Amount debited to factory overhead	$    422,000.00	Dr
Amount Credited to factory overhead	$    388,000.00	Cr
Balance in factory overhead account	$      34,000.00	Dr

.

(A)	Estimated Manufacturing Overheads	$ 456,000.00
(B)	Estimated Direct labor cost	$ 2,280,000.00
C= (A/B)	Predetermined Overhead rate	20%
(D)	Actual Direct labor cost	$ 1,940,000.00
E=(DxC)	Overheads Applied	$      388,000.00