Question

instructions help Ch2 Qui2 Save & Exit Submit Question 5 (of 6) Manufacturing $429 600, and actual labor hours were 21400 To dispose of the balance in the be conect? year along with 20.400 direct labor hours Actual manufacturing overhead was Overhead account, overhead was estimated to be $408,000 which of the following would O Cost of Goods Sold would be debited for $8,400 O Cost of Goods Sold would be credited for $8.400 O Cost of Goods Sold would be credited for $11600 O Cost of Goods Sold would be debited for $1.600

Answer 1

Ans.	Option b
	*Calculations:
	Predetermined overhead rate   = Estimated manufacturing overhead cost / Estimated direct labor hours
		408000 / 20400
		20	per direct labor hour
	Applied overhead = Predetermined overhead rate * Actual direct labor hours
		20 * 21400
		428000
	Over applied overhead = Applied overhead - Actual overhead
		428000 - 419600
		8400
	*In the case of over applied overhead the cost of goods sold is credited.
	General journal	Debit	Credit
	Manufacturing overhead	8400
	Cost of goods sold		8400
	(To reduce cost of goods sold for over applied overhead)