Question

*A company’s Factory Overhead account shows total debits of $624,000 and total credits of $646,000 at...

*A company’s Factory Overhead account shows total debits of $624,000 and total credits of $646,000 at the end of the year. Determine whether there is over- or underapplied overhead using the T-account below.

*Record the entry to close the balance in the Factory Overhead account

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Answer #1

Correct Answer:

Manufacturing Overheads Are Over Applied

Working:

Manufacturing Overhead

Debit

Credit

$      624,000

$        646,000

Bal

$         22,000

When Manufacturing overhead has a Debit ending balance, it means that the overhead is over applied.

End of answer.

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