Question

14.

Bretthauer Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $60,000 and the total of the credits to the account was $72,000. Which of the following statements is true?

A. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $60,000.

B. Manufacturing overhead for the month was underapplied by $12,000

C. Actual manufacturing overhead incurred during the month was $72,000

D. Manufacturing overhead applied to Work in Process for the month was $72,000

Answer 1

Debit to manufacturing overhead account = $60,000

Credit to manufacturing overhead account = $72,000

Actual manufacturing overhead is debited to manufacturing account and applied manufacturing overhead is credited to manufacturing account. Since credit of manufacturing account is $12,000 more than debit of manufacturing overhead account, hence manufacturing overhead was over applied by $12,000.

Hence, manufacturing overhead applied ( credit to manufacturing overhead account ) was $72,000.

Correct option is D.

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