Refer to the T-account below: The ending balance of $8,000 represents which of the following?
A)Underapplied overhead.
B)Manufacturing overhead that will be carried over to the next period.
C)Overapplied overhead.
D)A bookkeeping error.

Question

Refer to the T-account below:  The ending balance of $8,000 represents which of the following?
A)Underapplied overhead. 
B)Manufacturing overhead that will be carried over to the next period. 
C)Overapplied overhead. 
D)A bookkeeping error.

Quizplus · Accepted Answer

The T-account shows that the total debits ($60,000) exceeded the total credits ($52,000) by $8,000. This indicates an overapplied overhead, which occurs when more overhead costs are allocated than were actually incurred. Therefore, the ending balance of $8,000 represents overapplied overhead.

Refer to the T-Account Below: the Ending Balance of $8,000