Question

Matthias Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of May. 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 $83,000. Which of the following statements is true? Multiple Choice O Manufacturing overhead applied to Work in Process for the month was $83,000. O Actual manufacturing overhead incurred during the month was $83.000. O Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $60,000. O Manufacturing overhead for the month was underapplied by $23,000.

Answer 1

Ans. Option 1st Manufacturing overhead applied to work in process for the month was $83,000.

Explanation:

Actual overhead costs are entered at the debit side and applied overhead costs are entered at the credit side of the 'T' account of manufacturing overhead.

As per the given information, applied overhead ($83,000) is greater than the actual overhead ($60,000) it means that the overhead is over applied by $23,000 (i.e. $83,000 - $60,000).